Correlation Between C Mer and Citigroup
Can any of the company-specific risk be diversified away by investing in both C Mer 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 C Mer and Citigroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between C Mer Industries and Citigroup, you can compare the effects of market volatilities on C Mer 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 C Mer with a short position of Citigroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of C Mer and Citigroup.
Diversification Opportunities for C Mer and Citigroup
Average diversification
The 3 months correlation between CMER and Citigroup is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding C Mer Industries and Citigroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup and C Mer 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 C Mer 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 C Mer i.e., C Mer and Citigroup go up and down completely randomly.
Pair Corralation between C Mer and Citigroup
Assuming the 90 days trading horizon C Mer Industries is expected to generate 3.03 times more return on investment than Citigroup. However, C Mer is 3.03 times more volatile than Citigroup. It trades about 0.1 of its potential returns per unit of risk. Citigroup is currently generating about 0.11 per unit of risk. If you would invest 65,200 in C Mer Industries on January 24, 2024 and sell it today you would earn a total of 50,800 from holding C Mer Industries or generate 77.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 81.07% |
| Values | Daily Returns |
C Mer Industries vs. Citigroup
Performance |
| Timeline |
| C Mer Industries |
| Citigroup |
C Mer and Citigroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with C Mer and Citigroup
The main advantage of trading using opposite C Mer and Citigroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if C Mer 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.The idea behind C Mer Industries and Citigroup 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.| 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |