Correlation Between Brill Shoe and Citigroup
Can any of the company-specific risk be diversified away by investing in both Brill Shoe 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 Brill Shoe and Citigroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brill Shoe Industries and Citigroup, you can compare the effects of market volatilities on Brill Shoe 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 Brill Shoe with a short position of Citigroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brill Shoe and Citigroup.
Diversification Opportunities for Brill Shoe and Citigroup
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Brill and Citigroup is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Brill Shoe Industries and Citigroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup and Brill Shoe 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 Brill Shoe Industries 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 Brill Shoe i.e., Brill Shoe and Citigroup go up and down completely randomly.
Pair Corralation between Brill Shoe and Citigroup
Assuming the 90 days trading horizon Brill Shoe Industries is expected to generate 3.4 times more return on investment than Citigroup. However, Brill Shoe is 3.4 times more volatile than Citigroup. It trades about 0.09 of its potential returns per unit of risk. Citigroup is currently generating about 0.14 per unit of risk. If you would invest 86,040 in Brill Shoe Industries on January 18, 2024 and sell it today you would earn a total of 14,260 from holding Brill Shoe Industries or generate 16.57% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 80.95% |
Values | Daily Returns |
Brill Shoe Industries vs. Citigroup
Performance |
Timeline |
Brill Shoe Industries |
Citigroup |
Brill Shoe and Citigroup Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Brill Shoe and Citigroup
The main advantage of trading using opposite Brill Shoe and Citigroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brill Shoe 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.Brill Shoe vs. Bank Leumi Le Israel | Brill Shoe vs. Azrieli Group | Brill Shoe vs. Mizrahi Tefahot | Brill Shoe vs. Israel Discount Bank |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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