Correlation Between Citigroup and TLGY Acquisition
Can any of the company-specific risk be diversified away by investing in both Citigroup and TLGY Acquisition 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 TLGY Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and TLGY Acquisition Corp, you can compare the effects of market volatilities on Citigroup and TLGY Acquisition 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 TLGY Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and TLGY Acquisition.
Diversification Opportunities for Citigroup and TLGY Acquisition
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and TLGY is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and TLGY Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TLGY Acquisition Corp 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 TLGY Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TLGY Acquisition Corp has no effect on the direction of Citigroup i.e., Citigroup and TLGY Acquisition go up and down completely randomly.
Pair Corralation between Citigroup and TLGY Acquisition
Taking into account the 90-day investment horizon Citigroup is expected to generate 20.03 times more return on investment than TLGY Acquisition. However, Citigroup is 20.03 times more volatile than TLGY Acquisition Corp. It trades about 0.07 of its potential returns per unit of risk. TLGY Acquisition Corp is currently generating about 0.18 per unit of risk. If you would invest 6,079 in Citigroup on September 1, 2024 and sell it today you would earn a total of 1,008 from holding Citigroup or generate 16.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Citigroup vs. TLGY Acquisition Corp
Performance |
| Timeline |
| Citigroup |
| TLGY Acquisition Corp |
Citigroup and TLGY Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and TLGY Acquisition
The main advantage of trading using opposite Citigroup and TLGY Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, TLGY Acquisition 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 TLGY Acquisition will offset losses from the drop in TLGY Acquisition's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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