Correlation Between 3M and CITIGROUP
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By analyzing existing cross correlation between 3M Company and CITIGROUP INC 475, you can compare the effects of market volatilities on 3M 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 3M with a short position of CITIGROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3M and CITIGROUP.
Diversification Opportunities for 3M and CITIGROUP
Weak diversification
The 3 months correlation between 3M and CITIGROUP is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding 3M Company and CITIGROUP INC 475 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIGROUP INC 475 and 3M 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 3M Company 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 475 has no effect on the direction of 3M i.e., 3M and CITIGROUP go up and down completely randomly.
Pair Corralation between 3M and CITIGROUP
Considering the 90-day investment horizon 3M Company is expected to generate 1.49 times more return on investment than CITIGROUP. However, 3M is 1.49 times more volatile than CITIGROUP INC 475. It trades about 0.0 of its potential returns per unit of risk. CITIGROUP INC 475 is currently generating about -0.05 per unit of risk. If you would invest 13,091 in 3M Company on August 28, 2024 and sell it today you would lose (59.00) from holding 3M Company or give up 0.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.88% |
| Values | Daily Returns |
3M Company vs. CITIGROUP INC 475
Performance |
| Timeline |
| 3M Company |
| CITIGROUP INC 475 |
3M and CITIGROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 3M and CITIGROUP
The main advantage of trading using opposite 3M and CITIGROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 3M 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.| 3M vs. Vast Renewables Limited | 3M vs. 1847 Holdings LLC | 3M vs. Westport Fuel Systems | 3M vs. Brookfield Business Partners |
| CITIGROUP vs. AEP TEX INC | CITIGROUP vs. US BANK NATIONAL | CITIGROUP vs. 3M Company | CITIGROUP vs. Alcoa Corp |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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