Correlation Between Citigroup and SIGNA Sports
Can any of the company-specific risk be diversified away by investing in both Citigroup and SIGNA Sports 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 SIGNA Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and SIGNA Sports United, you can compare the effects of market volatilities on Citigroup and SIGNA Sports 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 SIGNA Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and SIGNA Sports.
Diversification Opportunities for Citigroup and SIGNA Sports
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and SIGNA is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and SIGNA Sports United in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIGNA Sports United 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 SIGNA Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIGNA Sports United has no effect on the direction of Citigroup i.e., Citigroup and SIGNA Sports go up and down completely randomly.
Pair Corralation between Citigroup and SIGNA Sports
If you would invest 4,567 in Citigroup on September 28, 2024 and sell it today you would earn a total of 2,508 from holding Citigroup or generate 54.93% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 0.37% |
Values | Daily Returns |
Citigroup vs. SIGNA Sports United
Performance |
Timeline |
Citigroup |
SIGNA Sports United |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Citigroup and SIGNA Sports Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Citigroup and SIGNA Sports
The main advantage of trading using opposite Citigroup and SIGNA Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, SIGNA Sports 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 SIGNA Sports will offset losses from the drop in SIGNA Sports' long position.The idea behind Citigroup and SIGNA Sports United 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.SIGNA Sports vs. Sally Beauty Holdings | SIGNA Sports vs. National Vision Holdings | SIGNA Sports vs. MarineMax | SIGNA Sports vs. Caseys General Stores |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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