Correlation Between Satcom Systems and Citigroup
Can any of the company-specific risk be diversified away by investing in both Satcom Systems 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 Satcom Systems and Citigroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Satcom Systems and Citigroup, you can compare the effects of market volatilities on Satcom Systems 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 Satcom Systems with a short position of Citigroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Satcom Systems and Citigroup.
Diversification Opportunities for Satcom Systems and Citigroup
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Satcom and Citigroup is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Satcom Systems and Citigroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup and Satcom Systems 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 Satcom Systems 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 Satcom Systems i.e., Satcom Systems and Citigroup go up and down completely randomly.
Pair Corralation between Satcom Systems and Citigroup
Assuming the 90 days trading horizon Satcom Systems is expected to generate 4.13 times more return on investment than Citigroup. However, Satcom Systems is 4.13 times more volatile than Citigroup. It trades about 0.12 of its potential returns per unit of risk. Citigroup is currently generating about 0.11 per unit of risk. If you would invest 2,540 in Satcom Systems on January 19, 2024 and sell it today you would earn a total of 4,060 from holding Satcom Systems or generate 159.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 81.5% |
| Values | Daily Returns |
Satcom Systems vs. Citigroup
Performance |
| Timeline |
| Satcom Systems |
| Citigroup |
Satcom Systems and Citigroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Satcom Systems and Citigroup
The main advantage of trading using opposite Satcom Systems and Citigroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Satcom Systems 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.| Satcom Systems vs. EN Shoham Business | Satcom Systems vs. Accel Solutions Group | Satcom Systems vs. SR Accord | Satcom Systems vs. Rapac Communication Infrastructure |
| 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.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |