Correlation Between Citigroup and Tikun Olam
Can any of the company-specific risk be diversified away by investing in both Citigroup and Tikun Olam at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Citigroup and Tikun Olam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Tikun Olam Cannbit, you can compare the effects of market volatilities on Citigroup and Tikun Olam and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Citigroup with a short position of Tikun Olam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Tikun Olam.
Diversification Opportunities for Citigroup and Tikun Olam
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Citigroup and Tikun is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Tikun Olam Cannbit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tikun Olam Cannbit and Citigroup is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Citigroup are associated (or correlated) with Tikun Olam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tikun Olam Cannbit has no effect on the direction of Citigroup i.e., Citigroup and Tikun Olam go up and down completely randomly.
Pair Corralation between Citigroup and Tikun Olam
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.29 times more return on investment than Tikun Olam. However, Citigroup is 3.44 times less risky than Tikun Olam. It trades about 0.12 of its potential returns per unit of risk. Tikun Olam Cannbit is currently generating about 0.01 per unit of risk. If you would invest 4,004 in Citigroup on September 12, 2024 and sell it today you would earn a total of 3,200 from holding Citigroup or generate 79.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 77.95% |
| Values | Daily Returns |
Citigroup vs. Tikun Olam Cannbit
Performance |
| Timeline |
| Citigroup |
| Tikun Olam Cannbit |
Citigroup and Tikun Olam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Tikun Olam
The main advantage of trading using opposite Citigroup and Tikun Olam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Tikun Olam can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Tikun Olam will offset losses from the drop in Tikun Olam's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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