Correlation Between Twitter and Citigroup
Can any of the company-specific risk be diversified away by investing in both Twitter and Citigroup 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 Twitter and Citigroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Twitter and Citigroup, you can compare the effects of market volatilities on Twitter and Citigroup 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 Twitter with a short position of Citigroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Twitter and Citigroup.
Diversification Opportunities for Twitter and Citigroup
Poor diversification
The 3 months correlation between Twitter and Citigroup is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Twitter and Citigroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup and Twitter 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 Twitter are associated (or correlated) with Citigroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citigroup has no effect on the direction of Twitter i.e., Twitter and Citigroup go up and down completely randomly.
Pair Corralation between Twitter and Citigroup
If you would invest 6,166 in Citigroup on January 26, 2024 and sell it today you would earn a total of 81.00 from holding Citigroup or generate 1.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Twitter vs. Citigroup
Performance |
| Timeline |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Citigroup |
Twitter and Citigroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Twitter and Citigroup
The main advantage of trading using opposite Twitter and Citigroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Twitter position performs unexpectedly, Citigroup 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 Citigroup will offset losses from the drop in Citigroup's long position.| Twitter vs. Mid Atlantic Home Health | Twitter vs. Planet Fitness | Twitter vs. JBG SMITH Properties | Twitter vs. Bassett Furniture Industries |
| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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