Correlation Between Citigroup and Group 6
Can any of the company-specific risk be diversified away by investing in both Citigroup and Group 6 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 Group 6 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Group 6 Metals, you can compare the effects of market volatilities on Citigroup and Group 6 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 Group 6. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Group 6.
Diversification Opportunities for Citigroup and Group 6
Weak diversification
The 3 months correlation between Citigroup and Group is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Group 6 Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Group 6 Metals 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 Group 6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Group 6 Metals has no effect on the direction of Citigroup i.e., Citigroup and Group 6 go up and down completely randomly.
Pair Corralation between Citigroup and Group 6
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.93 times more return on investment than Group 6. However, Citigroup is 1.08 times less risky than Group 6. It trades about 0.21 of its potential returns per unit of risk. Group 6 Metals is currently generating about 0.07 per unit of risk. If you would invest 5,680 in Citigroup on September 11, 2024 and sell it today you would earn a total of 1,506 from holding Citigroup or generate 26.51% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 98.44% |
Values | Daily Returns |
Citigroup vs. Group 6 Metals
Performance |
Timeline |
Citigroup |
Group 6 Metals |
Citigroup and Group 6 Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Citigroup and Group 6
The main advantage of trading using opposite Citigroup and Group 6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Group 6 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 Group 6 will offset losses from the drop in Group 6's long position.Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Royal Bank of | Citigroup vs. Canadian Imperial Bank |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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