Correlation Between Citigroup and JDS UNIPHASE
Can any of the company-specific risk be diversified away by investing in both Citigroup and JDS UNIPHASE 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 JDS UNIPHASE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and JDS UNIPHASE, you can compare the effects of market volatilities on Citigroup and JDS UNIPHASE 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 JDS UNIPHASE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and JDS UNIPHASE.
Diversification Opportunities for Citigroup and JDS UNIPHASE
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Citigroup and JDS is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and JDS UNIPHASE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JDS UNIPHASE 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 JDS UNIPHASE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JDS UNIPHASE has no effect on the direction of Citigroup i.e., Citigroup and JDS UNIPHASE go up and down completely randomly.
Pair Corralation between Citigroup and JDS UNIPHASE
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.66 times more return on investment than JDS UNIPHASE. However, Citigroup is 1.53 times less risky than JDS UNIPHASE. It trades about 0.11 of its potential returns per unit of risk. JDS UNIPHASE is currently generating about 0.04 per unit of risk. If you would invest 4,642 in Citigroup on September 4, 2024 and sell it today you would earn a total of 2,497 from holding Citigroup or generate 53.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.8% |
| Values | Daily Returns |
Citigroup vs. JDS UNIPHASE
Performance |
| Timeline |
| Citigroup |
| JDS UNIPHASE |
Citigroup and JDS UNIPHASE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and JDS UNIPHASE
The main advantage of trading using opposite Citigroup and JDS UNIPHASE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, JDS UNIPHASE 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 JDS UNIPHASE will offset losses from the drop in JDS UNIPHASE's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| JDS UNIPHASE vs. Martin Marietta Materials | JDS UNIPHASE vs. Computer And Technologies | JDS UNIPHASE vs. Japan Tobacco | JDS UNIPHASE vs. Plastic Omnium |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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