Correlation Between Sector 10 and Citigroup
Can any of the company-specific risk be diversified away by investing in both Sector 10 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 Sector 10 and Citigroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sector 10 and Citigroup, you can compare the effects of market volatilities on Sector 10 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 Sector 10 with a short position of Citigroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sector 10 and Citigroup.
Diversification Opportunities for Sector 10 and Citigroup
Pay attention - limited upside
The 3 months correlation between Sector and Citigroup is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Sector 10 and Citigroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup and Sector 10 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 Sector 10 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 Sector 10 i.e., Sector 10 and Citigroup go up and down completely randomly.
Pair Corralation between Sector 10 and Citigroup
If you would invest 6,113 in Citigroup on February 9, 2024 and sell it today you would earn a total of 162.00 from holding Citigroup or generate 2.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sector 10 vs. Citigroup
Performance |
| Timeline |
| Sector 10 |
| Citigroup |
Sector 10 and Citigroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sector 10 and Citigroup
The main advantage of trading using opposite Sector 10 and Citigroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sector 10 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.| Sector 10 vs. Virtual Medical International | Sector 10 vs. CuraScientific Corp | Sector 10 vs. Love Hemp Group | Sector 10 vs. TransGlobal Assets |
| 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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