Correlation Between Citigroup and Cambria Cannabis
Can any of the company-specific risk be diversified away by investing in both Citigroup and Cambria Cannabis 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 Cambria Cannabis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Cambria Cannabis ETF, you can compare the effects of market volatilities on Citigroup and Cambria Cannabis 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 Cambria Cannabis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Cambria Cannabis.
Diversification Opportunities for Citigroup and Cambria Cannabis
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Cambria is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Cambria Cannabis ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambria Cannabis ETF 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 Cambria Cannabis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambria Cannabis ETF has no effect on the direction of Citigroup i.e., Citigroup and Cambria Cannabis go up and down completely randomly.
Pair Corralation between Citigroup and Cambria Cannabis
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.93 times more return on investment than Cambria Cannabis. However, Citigroup is 1.07 times less risky than Cambria Cannabis. It trades about 0.07 of its potential returns per unit of risk. Cambria Cannabis ETF is currently generating about -0.01 per unit of risk. If you would invest 4,237 in Citigroup on September 4, 2024 and sell it today you would earn a total of 2,902 from holding Citigroup or generate 68.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Cambria Cannabis ETF
Performance |
| Timeline |
| Citigroup |
| Cambria Cannabis ETF |
Citigroup and Cambria Cannabis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Cambria Cannabis
The main advantage of trading using opposite Citigroup and Cambria Cannabis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Cambria Cannabis 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 Cambria Cannabis will offset losses from the drop in Cambria Cannabis' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Cambria Cannabis vs. Managed Account Series | Cambria Cannabis vs. Fidelity Sai International | Cambria Cannabis vs. Schwab Strategic Trust | Cambria Cannabis vs. Inpex Corp ADR |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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