Correlation Between Citigroup and Rimoni
Can any of the company-specific risk be diversified away by investing in both Citigroup and Rimoni 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 Rimoni into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Rimoni, you can compare the effects of market volatilities on Citigroup and Rimoni 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 Rimoni. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Rimoni.
Diversification Opportunities for Citigroup and Rimoni
Good diversification
The 3 months correlation between Citigroup and Rimoni is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Rimoni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rimoni 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 Rimoni. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rimoni has no effect on the direction of Citigroup i.e., Citigroup and Rimoni go up and down completely randomly.
Pair Corralation between Citigroup and Rimoni
Taking into account the 90-day investment horizon Citigroup is expected to under-perform the Rimoni. But the stock apears to be less risky and, when comparing its historical volatility, Citigroup is 1.38 times less risky than Rimoni. The stock trades about -0.05 of its potential returns per unit of risk. The Rimoni is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 526,644 in Rimoni on January 20, 2024 and sell it today you would earn a total of 7,956 from holding Rimoni or generate 1.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 86.36% |
| Values | Daily Returns |
Citigroup vs. Rimoni
Performance |
| Timeline |
| Citigroup |
| Rimoni |
Citigroup and Rimoni Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Rimoni
The main advantage of trading using opposite Citigroup and Rimoni positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Rimoni 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 Rimoni will offset losses from the drop in Rimoni's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Rimoni vs. Elbit Systems | Rimoni vs. Bezeq Israeli Telecommunication | Rimoni vs. Bank Hapoalim | Rimoni vs. Teva Pharmaceutical Industries |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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