This module allows you to analyze existing cross correlation between Citigroup and Sprint Corporation. You can compare the effects of market volatilities on Citigroup and Sprint 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 Sprint. See also your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Sprint.
Taking into account the 30 trading days horizon, Citigroup is expected to generate 0.32 times more return on investment than Sprint. However, Citigroup is 3.08 times less risky than Sprint. It trades about -0.05 of its potential returns per unit of risk. Sprint Corporation is currently generating about -0.17 per unit of risk. If you would invest 6,936 in Citigroup on April 25, 2018 and sell it today you would lose (99.00) from holding Citigroup or give up 1.43% of portfolio value over 30 days.
Overlapping area represents the amount of risk that can be diversified away by holding Citigroup Inc and Sprint Corp. in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Sprint 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 Sprint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprint has no effect on the direction of Citigroup i.e. Citigroup and Sprint go up and down completely randomly.
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