Correlation Between NYSE Composite and Citigroup Capital
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Citigroup Capital 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 NYSE Composite and Citigroup Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Citigroup Capital XIII, you can compare the effects of market volatilities on NYSE Composite and Citigroup Capital 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 NYSE Composite with a short position of Citigroup Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Citigroup Capital.
Diversification Opportunities for NYSE Composite and Citigroup Capital
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NYSE and Citigroup is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Citigroup Capital XIII in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup Capital XIII and NYSE Composite 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 NYSE Composite are associated (or correlated) with Citigroup Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citigroup Capital XIII has no effect on the direction of NYSE Composite i.e., NYSE Composite and Citigroup Capital go up and down completely randomly.
Pair Corralation between NYSE Composite and Citigroup Capital
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.97 times more return on investment than Citigroup Capital. However, NYSE Composite is 1.97 times more volatile than Citigroup Capital XIII. It trades about 0.11 of its potential returns per unit of risk. Citigroup Capital XIII is currently generating about 0.21 per unit of risk. If you would invest 1,627,444 in NYSE Composite on November 5, 2024 and sell it today you would earn a total of 372,438 from holding NYSE Composite or generate 22.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Citigroup Capital XIII
Performance |
| Timeline |
NYSE Composite and Citigroup Capital Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Citigroup Capital XIII
Pair trading matchups for Citigroup Capital
Pair Trading with NYSE Composite and Citigroup Capital
The main advantage of trading using opposite NYSE Composite and Citigroup Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Citigroup Capital 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 Capital will offset losses from the drop in Citigroup Capital's long position.| NYSE Composite vs. Aris Water Solutions | NYSE Composite vs. Marfrig Global Foods | NYSE Composite vs. CenterPoint Energy | NYSE Composite vs. Sysco |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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