Correlation Between North Media and Citigroup
Can any of the company-specific risk be diversified away by investing in both North Media 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 North Media and Citigroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between North Media AS and Citigroup, you can compare the effects of market volatilities on North Media 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 North Media with a short position of Citigroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of North Media and Citigroup.
Diversification Opportunities for North Media and Citigroup
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between North and Citigroup is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding North Media AS and Citigroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup and North Media 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 North Media 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 North Media i.e., North Media and Citigroup go up and down completely randomly.
Pair Corralation between North Media and Citigroup
Assuming the 90 days trading horizon North Media AS is expected to under-perform the Citigroup. In addition to that, North Media is 1.23 times more volatile than Citigroup. It trades about -0.18 of its total potential returns per unit of risk. Citigroup is currently generating about 0.08 per unit of volatility. If you would invest 6,095 in Citigroup on January 25, 2024 and sell it today you would earn a total of 152.00 from holding Citigroup or generate 2.49% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 90.91% |
Values | Daily Returns |
North Media AS vs. Citigroup
Performance |
Timeline |
North Media AS |
Citigroup |
North Media and Citigroup Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with North Media and Citigroup
The main advantage of trading using opposite North Media and Citigroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if North Media 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.North Media vs. Matas AS | North Media vs. cBrain AS | North Media vs. Alm Brand | North Media vs. Netcompany Group 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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