Correlation Between Citigroup and Comcast Holdings

Can any of the company-specific risk be diversified away by investing in both Citigroup and Comcast Holdings 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 Citigroup and Comcast Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Citigroup and Comcast Holdings Corp, you can compare the effects of market volatilities on Citigroup and Comcast Holdings 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 Citigroup with a short position of Comcast Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Comcast Holdings.

Diversification Opportunities for Citigroup and Comcast Holdings

0.47

Correlation Coefficient

Citigroup  Comcast Holdings

Very weak diversification

The 3 months correlation between Citigroup and Comcast is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Comcast Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comcast Holdings Corp and Citigroup 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 Citigroup are associated (or correlated) with Comcast Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comcast Holdings Corp has no effect on the direction of Citigroup i.e., Citigroup and Comcast Holdings go up and down completely randomly.

Pair Corralation between Citigroup and Comcast Holdings

Taking into account the 90-day investment horizon Citigroup is expected to generate 291.09 times less return on investment than Comcast Holdings. But when comparing it to its historical volatility, Citigroup is 104.11 times less risky than Comcast Holdings. It trades about 0.06 of its potential returns per unit of risk. Comcast Holdings Corp is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  5,849  in Comcast Holdings Corp on September 29, 2024 and sell it today you would earn a total of  258.00  from holding Comcast Holdings Corp or generate 4.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	60.32%
Values	Daily Returns

Citigroup  vs.  Comcast Holdings Corp

Citigroup

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Comcast Holdings Corp

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days Comcast Holdings Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental indicators, Comcast Holdings is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Citigroup and Comcast Holdings

The main advantage of trading using opposite Citigroup and Comcast Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Comcast Holdings 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 Comcast Holdings will offset losses from the drop in Comcast Holdings' long position.

The idea behind Citigroup and Comcast Holdings Corp 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.

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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 Stocks Directory module to find actively traded stocks across global markets.