Correlation Between Microsoft and CITIGROUP
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By analyzing existing cross correlation between Microsoft and CITIGROUP INC 465, you can compare the effects of market volatilities on Microsoft 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 Microsoft with a short position of CITIGROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and CITIGROUP.
Diversification Opportunities for Microsoft and CITIGROUP
Average diversification
The 3 months correlation between Microsoft and CITIGROUP is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and CITIGROUP INC 465 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIGROUP INC 465 and Microsoft 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 Microsoft 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 465 has no effect on the direction of Microsoft i.e., Microsoft and CITIGROUP go up and down completely randomly.
Pair Corralation between Microsoft and CITIGROUP
Given the investment horizon of 90 days Microsoft is expected to generate 1.22 times more return on investment than CITIGROUP. However, Microsoft is 1.22 times more volatile than CITIGROUP INC 465. It trades about 0.19 of its potential returns per unit of risk. CITIGROUP INC 465 is currently generating about 0.07 per unit of risk. If you would invest 40,554 in Microsoft on September 1, 2024 and sell it today you would earn a total of 1,792 from holding Microsoft or generate 4.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. CITIGROUP INC 465
Performance |
| Timeline |
| Microsoft |
| CITIGROUP INC 465 |
Microsoft and CITIGROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and CITIGROUP
The main advantage of trading using opposite Microsoft and CITIGROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft 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.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| CITIGROUP vs. SunOpta | CITIGROUP vs. National CineMedia | CITIGROUP vs. National Vision Holdings | CITIGROUP vs. Weibo 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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