This module allows you to analyze existing cross correlation between Citigroup and Apple. You can compare the effects of market volatilities on Citigroup and Apple 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 Citigroup with a short position of Apple. See also your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Apple.
Taking into account the 30 trading days horizon, Citigroup is expected to under-perform the Apple. But the stock apears to be less risky and, when comparing its historical volatility, Citigroup is 1.59 times less risky than Apple. The stock trades about -0.02 of its potential returns per unit of risk. The Apple is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 19,091 in Apple on July 15, 2018 and sell it today you would earn a total of 1,796 from holding Apple or generate 9.41% return on investment over 30 days.
Overlapping area represents the amount of risk that can be diversified away by holding Citigroup Inc and Apple Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Apple and Citigroup 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 Citigroup are associated (or correlated) with Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple has no effect on the direction of Citigroup i.e. Citigroup and Apple go up and down completely randomly.
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