Correlation Between Citigroup and Xeris Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Citigroup and Xeris Pharmaceuticals 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 Xeris Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Xeris Pharmaceuticals, you can compare the effects of market volatilities on Citigroup and Xeris Pharmaceuticals 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 Xeris Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Xeris Pharmaceuticals.
Diversification Opportunities for Citigroup and Xeris Pharmaceuticals
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Xeris is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Xeris Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xeris Pharmaceuticals 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 Xeris Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xeris Pharmaceuticals has no effect on the direction of Citigroup i.e., Citigroup and Xeris Pharmaceuticals go up and down completely randomly.
Pair Corralation between Citigroup and Xeris Pharmaceuticals
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.68 times more return on investment than Xeris Pharmaceuticals. However, Citigroup is 1.47 times less risky than Xeris Pharmaceuticals. It trades about 0.2 of its potential returns per unit of risk. Xeris Pharmaceuticals is currently generating about 0.11 per unit of risk. If you would invest 6,412 in Citigroup on August 30, 2024 and sell it today you would earn a total of 604.00 from holding Citigroup or generate 9.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Xeris Pharmaceuticals
Performance |
| Timeline |
| Citigroup |
| Xeris Pharmaceuticals |
Citigroup and Xeris Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Xeris Pharmaceuticals
The main advantage of trading using opposite Citigroup and Xeris Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Xeris Pharmaceuticals 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 Xeris Pharmaceuticals will offset losses from the drop in Xeris Pharmaceuticals' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Xeris Pharmaceuticals vs. Protalix Biotherapeutics | Xeris Pharmaceuticals vs. Seres Therapeutics | Xeris Pharmaceuticals vs. Cidara Therapeutics | Xeris Pharmaceuticals vs. Immunitybio |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Commodity Directory Find actively traded commodities issued by global exchanges |