Correlation Between Pearson PLC and CITIGROUP
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By analyzing existing cross correlation between Pearson PLC ADR and CITIGROUP INC, you can compare the effects of market volatilities on Pearson PLC 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 Pearson PLC with a short position of CITIGROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pearson PLC and CITIGROUP.
Diversification Opportunities for Pearson PLC and CITIGROUP
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pearson and CITIGROUP is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Pearson PLC ADR and CITIGROUP INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIGROUP INC and Pearson PLC 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 Pearson PLC ADR 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 has no effect on the direction of Pearson PLC i.e., Pearson PLC and CITIGROUP go up and down completely randomly.
Pair Corralation between Pearson PLC and CITIGROUP
Considering the 90-day investment horizon Pearson PLC ADR is expected to generate 2.04 times more return on investment than CITIGROUP. However, Pearson PLC is 2.04 times more volatile than CITIGROUP INC. It trades about 0.34 of its potential returns per unit of risk. CITIGROUP INC is currently generating about -0.18 per unit of risk. If you would invest 1,390 in Pearson PLC ADR on August 28, 2024 and sell it today you would earn a total of 159.00 from holding Pearson PLC ADR or generate 11.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Pearson PLC ADR vs. CITIGROUP INC
Performance |
| Timeline |
| Pearson PLC ADR |
| CITIGROUP INC |
Pearson PLC and CITIGROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pearson PLC and CITIGROUP
The main advantage of trading using opposite Pearson PLC and CITIGROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pearson PLC 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.| Pearson PLC vs. John Wiley Sons | Pearson PLC vs. New York Times | Pearson PLC vs. Lee Enterprises Incorporated | Pearson PLC vs. Gannett Co |
| CITIGROUP vs. AEP TEX INC | CITIGROUP vs. US BANK NATIONAL | CITIGROUP vs. Eat Beyond Global | CITIGROUP vs. Charles Schwab 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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