Correlation Between Citigroup and WORK Medical
Can any of the company-specific risk be diversified away by investing in both Citigroup and WORK Medical 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 WORK Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and WORK Medical Technology, you can compare the effects of market volatilities on Citigroup and WORK Medical 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 WORK Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and WORK Medical.
Diversification Opportunities for Citigroup and WORK Medical
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citigroup and WORK is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and WORK Medical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WORK Medical Technology 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 WORK Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WORK Medical Technology has no effect on the direction of Citigroup i.e., Citigroup and WORK Medical go up and down completely randomly.
Pair Corralation between Citigroup and WORK Medical
Taking into account the 90-day investment horizon Citigroup is expected to generate 7.17 times less return on investment than WORK Medical. But when comparing it to its historical volatility, Citigroup is 5.19 times less risky than WORK Medical. It trades about 0.1 of its potential returns per unit of risk. WORK Medical Technology is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 360.00 in WORK Medical Technology on September 12, 2024 and sell it today you would earn a total of 278.00 from holding WORK Medical Technology or generate 77.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 21.59% |
| Values | Daily Returns |
Citigroup vs. WORK Medical Technology
Performance |
| Timeline |
| Citigroup |
| WORK Medical Technology |
Citigroup and WORK Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and WORK Medical
The main advantage of trading using opposite Citigroup and WORK Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, WORK Medical 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 WORK Medical will offset losses from the drop in WORK Medical's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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