Correlation Between Citigroup and Micron Technology,

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

By analyzing existing cross correlation between Citigroup and Micron Technology,, you can compare the effects of market volatilities on Citigroup and Micron Technology, 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 Micron Technology,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Micron Technology,.

Diversification Opportunities for Citigroup and Micron Technology,

-0.36

Correlation Coefficient

Citigroup  Micron Technology,

Very good diversification

The 3 months correlation between Citigroup and Micron is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Micron Technology, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Micron Technology, 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 Micron Technology,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Micron Technology, has no effect on the direction of Citigroup i.e., Citigroup and Micron Technology, go up and down completely randomly.

Pair Corralation between Citigroup and Micron Technology,

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.36 times less return on investment than Micron Technology,. But when comparing it to its historical volatility, Citigroup is 1.86 times less risky than Micron Technology,. It trades about 0.41 of its potential returns per unit of risk. Micron Technology, is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest  2,042  in Micron Technology, on October 23, 2024 and sell it today you would earn a total of  400.00  from holding Micron Technology, or generate 19.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Citigroup  vs.  Micron Technology,

Citigroup

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Micron Technology,

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Micron Technology, are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Micron Technology, is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Citigroup and Micron Technology,

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

The idea behind Citigroup and Micron Technology, 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.

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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.