Correlation Between Citigroup and Ubisoft Entertainment
Can any of the company-specific risk be diversified away by investing in both Citigroup and Ubisoft Entertainment 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 Ubisoft Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Ubisoft Entertainment, you can compare the effects of market volatilities on Citigroup and Ubisoft Entertainment 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 Ubisoft Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Ubisoft Entertainment.
Diversification Opportunities for Citigroup and Ubisoft Entertainment
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Citigroup and Ubisoft is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Ubisoft Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ubisoft Entertainment 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 Ubisoft Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ubisoft Entertainment has no effect on the direction of Citigroup i.e., Citigroup and Ubisoft Entertainment go up and down completely randomly.
Pair Corralation between Citigroup and Ubisoft Entertainment
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.46 times more return on investment than Ubisoft Entertainment. However, Citigroup is 2.17 times less risky than Ubisoft Entertainment. It trades about 0.11 of its potential returns per unit of risk. Ubisoft Entertainment is currently generating about -0.06 per unit of risk. If you would invest 4,553 in Citigroup on August 27, 2024 and sell it today you would earn a total of 2,431 from holding Citigroup or generate 53.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.8% |
| Values | Daily Returns |
Citigroup vs. Ubisoft Entertainment
Performance |
| Timeline |
| Citigroup |
| Ubisoft Entertainment |
Citigroup and Ubisoft Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Ubisoft Entertainment
The main advantage of trading using opposite Citigroup and Ubisoft Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Ubisoft Entertainment 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 Ubisoft Entertainment will offset losses from the drop in Ubisoft Entertainment's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| Ubisoft Entertainment vs. Atos SE | Ubisoft Entertainment vs. Dassault Systemes SE | Ubisoft Entertainment vs. Vivendi SA | Ubisoft Entertainment vs. Alstom SA |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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