Correlation Between HP and CITIGROUP
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By analyzing existing cross correlation between HP Inc and CITIGROUP INC 6875, you can compare the effects of market volatilities on HP 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 HP with a short position of CITIGROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of HP and CITIGROUP.
Diversification Opportunities for HP and CITIGROUP
Poor diversification
The 3 months correlation between HP and CITIGROUP is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding HP Inc and CITIGROUP INC 6875 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIGROUP INC 6875 and HP 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 HP Inc 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 INC 6875 has no effect on the direction of HP i.e., HP and CITIGROUP go up and down completely randomly.
Pair Corralation between HP and CITIGROUP
Considering the 90-day investment horizon HP is expected to generate 1.54 times less return on investment than CITIGROUP. In addition to that, HP is 1.09 times more volatile than CITIGROUP INC 6875. It trades about 0.02 of its total potential returns per unit of risk. CITIGROUP INC 6875 is currently generating about 0.04 per unit of volatility. If you would invest 11,013 in CITIGROUP INC 6875 on November 2, 2024 and sell it today you would earn a total of 84.00 from holding CITIGROUP INC 6875 or generate 0.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HP Inc vs. CITIGROUP INC 6875
Performance |
| Timeline |
| HP Inc |
| CITIGROUP INC 6875 |
HP and CITIGROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HP and CITIGROUP
The main advantage of trading using opposite HP and CITIGROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HP 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.The idea behind HP Inc and CITIGROUP INC 6875 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.| CITIGROUP vs. Biglari Holdings | CITIGROUP vs. RCI Hospitality Holdings | CITIGROUP vs. Afya | CITIGROUP vs. Gannett Co |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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