Correlation Between Citigroup and Seven West
Can any of the company-specific risk be diversified away by investing in both Citigroup and Seven West 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 Seven West into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Seven West Media, you can compare the effects of market volatilities on Citigroup and Seven West 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 Seven West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Seven West.
Diversification Opportunities for Citigroup and Seven West
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and Seven is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Seven West Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seven West Media 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 Seven West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seven West Media has no effect on the direction of Citigroup i.e., Citigroup and Seven West go up and down completely randomly.
Pair Corralation between Citigroup and Seven West
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.35 times more return on investment than Seven West. However, Citigroup is 2.85 times less risky than Seven West. It trades about 0.08 of its potential returns per unit of risk. Seven West Media is currently generating about -0.04 per unit of risk. If you would invest 4,544 in Citigroup on September 1, 2024 and sell it today you would earn a total of 2,543 from holding Citigroup or generate 55.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.89% |
| Values | Daily Returns |
Citigroup vs. Seven West Media
Performance |
| Timeline |
| Citigroup |
| Seven West Media |
Citigroup and Seven West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Seven West
The main advantage of trading using opposite Citigroup and Seven West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Seven West 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 Seven West will offset losses from the drop in Seven West's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Seven West vs. Live Nation Entertainment | Seven West vs. Fuji Media Holdings | Seven West vs. Rai Way SpA | Seven West vs. Superior Plus Corp |
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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