Correlation Between Citigroup and KRAFT
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By analyzing existing cross correlation between Citigroup and KRAFT HEINZ FOODS, you can compare the effects of market volatilities on Citigroup and KRAFT 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 KRAFT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and KRAFT.
Diversification Opportunities for Citigroup and KRAFT
Very good diversification
The 3 months correlation between Citigroup and KRAFT is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and KRAFT HEINZ FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KRAFT HEINZ FOODS 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 KRAFT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KRAFT HEINZ FOODS has no effect on the direction of Citigroup i.e., Citigroup and KRAFT go up and down completely randomly.
Pair Corralation between Citigroup and KRAFT
Taking into account the 90-day investment horizon Citigroup is expected to generate 4.42 times more return on investment than KRAFT. However, Citigroup is 4.42 times more volatile than KRAFT HEINZ FOODS. It trades about 0.11 of its potential returns per unit of risk. KRAFT HEINZ FOODS is currently generating about -0.01 per unit of risk. If you would invest 4,676 in Citigroup on September 2, 2024 and sell it today you would earn a total of 2,411 from holding Citigroup or generate 51.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Citigroup vs. KRAFT HEINZ FOODS
Performance |
| Timeline |
| Citigroup |
| KRAFT HEINZ FOODS |
Citigroup and KRAFT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and KRAFT
The main advantage of trading using opposite Citigroup and KRAFT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, KRAFT 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 KRAFT will offset losses from the drop in KRAFT's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| KRAFT vs. Turning Point Brands | KRAFT vs. Molson Coors Brewing | KRAFT vs. Philip Morris International | KRAFT vs. Japan Tobacco 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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