Correlation Between Citigroup and Gabelli Healthcare
Can any of the company-specific risk be diversified away by investing in both Citigroup and Gabelli Healthcare 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 Gabelli Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and The Gabelli Healthcare, you can compare the effects of market volatilities on Citigroup and Gabelli Healthcare 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 Gabelli Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Gabelli Healthcare.
Diversification Opportunities for Citigroup and Gabelli Healthcare
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Gabelli is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and The Gabelli Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Gabelli Healthcare 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 Gabelli Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Gabelli Healthcare has no effect on the direction of Citigroup i.e., Citigroup and Gabelli Healthcare go up and down completely randomly.
Pair Corralation between Citigroup and Gabelli Healthcare
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.17 times more return on investment than Gabelli Healthcare. However, Citigroup is 2.17 times more volatile than The Gabelli Healthcare. It trades about 0.07 of its potential returns per unit of risk. The Gabelli Healthcare is currently generating about 0.04 per unit of risk. If you would invest 6,117 in Citigroup on August 29, 2024 and sell it today you would earn a total of 899.00 from holding Citigroup or generate 14.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. The Gabelli Healthcare
Performance |
| Timeline |
| Citigroup |
| The Gabelli Healthcare |
Citigroup and Gabelli Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Gabelli Healthcare
The main advantage of trading using opposite Citigroup and Gabelli Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Gabelli Healthcare 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 Gabelli Healthcare will offset losses from the drop in Gabelli Healthcare's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Gabelli Healthcare vs. Vanguard Total Stock | Gabelli Healthcare vs. Vanguard 500 Index | Gabelli Healthcare vs. Vanguard Total Stock | Gabelli Healthcare vs. Vanguard Total Stock |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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