Correlation Between Hilton Food and Citigroup
Can any of the company-specific risk be diversified away by investing in both Hilton Food and Citigroup 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 Hilton Food and Citigroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hilton Food Group and Citigroup, you can compare the effects of market volatilities on Hilton Food and Citigroup 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 Hilton Food with a short position of Citigroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hilton Food and Citigroup.
Diversification Opportunities for Hilton Food and Citigroup
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hilton and Citigroup is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Hilton Food Group and Citigroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup and Hilton Food 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 Hilton Food Group are associated (or correlated) with Citigroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citigroup has no effect on the direction of Hilton Food i.e., Hilton Food and Citigroup go up and down completely randomly.
Pair Corralation between Hilton Food and Citigroup
Assuming the 90 days trading horizon Hilton Food Group is expected to under-perform the Citigroup. But the stock apears to be less risky and, when comparing its historical volatility, Hilton Food Group is 1.2 times less risky than Citigroup. The stock trades about -0.07 of its potential returns per unit of risk. The Citigroup is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 7,058 in Citigroup on November 3, 2024 and sell it today you would earn a total of 1,043 from holding Citigroup or generate 14.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hilton Food Group vs. Citigroup
Performance |
| Timeline |
| Hilton Food Group |
| Citigroup |
Hilton Food and Citigroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hilton Food and Citigroup
The main advantage of trading using opposite Hilton Food and Citigroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hilton Food position performs unexpectedly, Citigroup 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 Citigroup will offset losses from the drop in Citigroup's long position.| Hilton Food vs. Check Point Software | Hilton Food vs. Alliance Data Systems | Hilton Food vs. Learning Technologies Group | Hilton Food vs. Rosslyn Data Technologies |
| Citigroup vs. Sovereign Metals | Citigroup vs. Jacquet Metal Service | Citigroup vs. Empire Metals Limited | Citigroup vs. Alien Metals |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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