Correlation Between CBrain AS and Citigroup
Can any of the company-specific risk be diversified away by investing in both CBrain AS 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 CBrain AS and Citigroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between cBrain AS and Citigroup, you can compare the effects of market volatilities on CBrain AS 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 CBrain AS with a short position of Citigroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBrain AS and Citigroup.
Diversification Opportunities for CBrain AS and Citigroup
Very poor diversification
The 3 months correlation between CBrain and Citigroup is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding cBrain AS and Citigroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup and CBrain AS 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 cBrain AS 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 CBrain AS i.e., CBrain AS and Citigroup go up and down completely randomly.
Pair Corralation between CBrain AS and Citigroup
Assuming the 90 days trading horizon cBrain AS is expected to under-perform the Citigroup. In addition to that, CBrain AS is 1.43 times more volatile than Citigroup. It trades about -0.31 of its total potential returns per unit of risk. Citigroup is currently generating about -0.02 per unit of volatility. If you would invest 5,886 in Citigroup on January 19, 2024 and sell it today you would lose (54.00) from holding Citigroup or give up 0.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 90.91% |
| Values | Daily Returns |
cBrain AS vs. Citigroup
Performance |
| Timeline |
| cBrain AS |
| Citigroup |
CBrain AS and Citigroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CBrain AS and Citigroup
The main advantage of trading using opposite CBrain AS and Citigroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBrain AS 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.| CBrain AS vs. ChemoMetec AS | CBrain AS vs. Ambu AS | CBrain AS vs. Genmab AS | CBrain AS vs. Zealand Pharma AS |
| 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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