Correlation Between Citigroup and NORFOLK
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By analyzing existing cross correlation between Citigroup and NORFOLK SOUTHN P, you can compare the effects of market volatilities on Citigroup and NORFOLK 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 NORFOLK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and NORFOLK.
Diversification Opportunities for Citigroup and NORFOLK
Excellent diversification
The 3 months correlation between Citigroup and NORFOLK is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and NORFOLK SOUTHN P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORFOLK SOUTHN P 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 NORFOLK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NORFOLK SOUTHN P has no effect on the direction of Citigroup i.e., Citigroup and NORFOLK go up and down completely randomly.
Pair Corralation between Citigroup and NORFOLK
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.35 times more return on investment than NORFOLK. However, Citigroup is 2.35 times more volatile than NORFOLK SOUTHN P. It trades about 0.14 of its potential returns per unit of risk. NORFOLK SOUTHN P is currently generating about -0.17 per unit of risk. If you would invest 6,245 in Citigroup on September 24, 2024 and sell it today you would earn a total of 674.00 from holding Citigroup or generate 10.79% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 97.62% |
Values | Daily Returns |
Citigroup vs. NORFOLK SOUTHN P
Performance |
Timeline |
Citigroup |
NORFOLK SOUTHN P |
Citigroup and NORFOLK Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Citigroup and NORFOLK
The main advantage of trading using opposite Citigroup and NORFOLK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, NORFOLK 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 NORFOLK will offset losses from the drop in NORFOLK's long position.The idea behind Citigroup and NORFOLK SOUTHN P 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.NORFOLK vs. Simon Property Group | NORFOLK vs. Fernhill Beverage | NORFOLK vs. BBB Foods | NORFOLK vs. Fevertree Drinks Plc |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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