Correlation Between Citigroup and Univar
Can any of the company-specific risk be diversified away by investing in both Citigroup and Univar 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 Univar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Univar Inc, you can compare the effects of market volatilities on Citigroup and Univar 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 Univar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Univar.
Diversification Opportunities for Citigroup and Univar
Poor diversification
The 3 months correlation between Citigroup and Univar is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Univar Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Univar Inc 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 Univar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Univar Inc has no effect on the direction of Citigroup i.e., Citigroup and Univar go up and down completely randomly.
Pair Corralation between Citigroup and Univar
If you would invest 6,255 in Citigroup on August 24, 2024 and sell it today you would earn a total of 729.00 from holding Citigroup or generate 11.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.35% |
| Values | Daily Returns |
Citigroup vs. Univar Inc
Performance |
| Timeline |
| Citigroup |
| Univar Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Citigroup and Univar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Univar
The main advantage of trading using opposite Citigroup and Univar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Univar 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 Univar will offset losses from the drop in Univar's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Univar vs. Valhi Inc | Univar vs. Huntsman | Univar vs. Lsb Industries | Univar vs. Westlake Chemical Partners |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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