Correlation Between Citigroup and Tema Electrification
Can any of the company-specific risk be diversified away by investing in both Citigroup and Tema Electrification 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 Tema Electrification into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Tema Electrification ETF, you can compare the effects of market volatilities on Citigroup and Tema Electrification 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 Tema Electrification. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Tema Electrification.
Diversification Opportunities for Citigroup and Tema Electrification
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Citigroup and Tema is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Tema Electrification ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tema Electrification ETF 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 Tema Electrification. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tema Electrification ETF has no effect on the direction of Citigroup i.e., Citigroup and Tema Electrification go up and down completely randomly.
Pair Corralation between Citigroup and Tema Electrification
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.85 times more return on investment than Tema Electrification. However, Citigroup is 1.17 times less risky than Tema Electrification. It trades about -0.06 of its potential returns per unit of risk. Tema Electrification ETF is currently generating about -0.18 per unit of risk. If you would invest 7,215 in Citigroup on October 7, 2024 and sell it today you would lose (115.00) from holding Citigroup or give up 1.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Tema Electrification ETF
Performance |
| Timeline |
| Citigroup |
| Tema Electrification ETF |
Citigroup and Tema Electrification Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Tema Electrification
The main advantage of trading using opposite Citigroup and Tema Electrification positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Tema Electrification 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 Tema Electrification will offset losses from the drop in Tema Electrification's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Tema Electrification vs. iShares Dividend and | Tema Electrification vs. Martin Currie Sustainable | Tema Electrification vs. VictoryShares THB Mid | Tema Electrification vs. Mast Global Battery |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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