Correlation Between Citigroup and Eureka Design
Can any of the company-specific risk be diversified away by investing in both Citigroup and Eureka Design 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 Eureka Design into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Eureka Design Public, you can compare the effects of market volatilities on Citigroup and Eureka Design 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 Eureka Design. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Eureka Design.
Diversification Opportunities for Citigroup and Eureka Design
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Eureka is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Eureka Design Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eureka Design Public 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 Eureka Design. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eureka Design Public has no effect on the direction of Citigroup i.e., Citigroup and Eureka Design go up and down completely randomly.
Pair Corralation between Citigroup and Eureka Design
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.49 times more return on investment than Eureka Design. However, Citigroup is 2.05 times less risky than Eureka Design. It trades about 0.07 of its potential returns per unit of risk. Eureka Design Public is currently generating about -0.03 per unit of risk. If you would invest 4,118 in Citigroup on August 29, 2024 and sell it today you would earn a total of 2,898 from holding Citigroup or generate 70.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.18% |
| Values | Daily Returns |
Citigroup vs. Eureka Design Public
Performance |
| Timeline |
| Citigroup |
| Eureka Design Public |
Citigroup and Eureka Design Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Eureka Design
The main advantage of trading using opposite Citigroup and Eureka Design positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Eureka Design 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 Eureka Design will offset losses from the drop in Eureka Design's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Eureka Design vs. Quality Houses Hotel | Eureka Design vs. Quality Houses Property | Eureka Design vs. SCG PACKAGING PCL NVDR | Eureka Design vs. CK Power Public |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |