Correlation Between Citigroup and White Label
Can any of the company-specific risk be diversified away by investing in both Citigroup and White Label 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 White Label into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and White Label Liquid, you can compare the effects of market volatilities on Citigroup and White Label 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 White Label. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and White Label.
Diversification Opportunities for Citigroup and White Label
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and White is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and White Label Liquid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on White Label Liquid 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 White Label. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of White Label Liquid has no effect on the direction of Citigroup i.e., Citigroup and White Label go up and down completely randomly.
Pair Corralation between Citigroup and White Label
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.33 times more return on investment than White Label. However, Citigroup is 3.03 times less risky than White Label. It trades about 0.07 of its potential returns per unit of risk. White Label Liquid is currently generating about -0.07 per unit of risk. If you would invest 4,308 in Citigroup on September 26, 2024 and sell it today you would earn a total of 2,792 from holding Citigroup or generate 64.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. White Label Liquid
Performance |
| Timeline |
| Citigroup |
| White Label Liquid |
Citigroup and White Label Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and White Label
The main advantage of trading using opposite Citigroup and White Label positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, White Label 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 White Label will offset losses from the drop in White Label's long position.The idea behind Citigroup and White Label Liquid pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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