Correlation Between Citigroup and Verallia
Can any of the company-specific risk be diversified away by investing in both Citigroup and Verallia 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 Verallia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Verallia, you can compare the effects of market volatilities on Citigroup and Verallia 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 Verallia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Verallia.
Diversification Opportunities for Citigroup and Verallia
Very good diversification
The 3 months correlation between Citigroup and Verallia is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Verallia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verallia 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 Verallia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verallia has no effect on the direction of Citigroup i.e., Citigroup and Verallia go up and down completely randomly.
Pair Corralation between Citigroup and Verallia
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.08 times more return on investment than Verallia. However, Citigroup is 1.08 times more volatile than Verallia. It trades about 0.32 of its potential returns per unit of risk. Verallia is currently generating about -0.16 per unit of risk. If you would invest 6,235 in Citigroup on September 3, 2024 and sell it today you would earn a total of 852.00 from holding Citigroup or generate 13.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Citigroup vs. Verallia
Performance |
| Timeline |
| Citigroup |
| Verallia |
Citigroup and Verallia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Verallia
The main advantage of trading using opposite Citigroup and Verallia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Verallia 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 Verallia will offset losses from the drop in Verallia's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Verallia vs. Gaztransport Technigaz SAS | Verallia vs. Imerys SA | Verallia vs. Amundi SA | Verallia vs. Rubis SCA |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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