Correlation Between FormPipe Software and Citigroup
Can any of the company-specific risk be diversified away by investing in both FormPipe Software 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 FormPipe Software and Citigroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FormPipe Software AB and Citigroup, you can compare the effects of market volatilities on FormPipe Software 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 FormPipe Software with a short position of Citigroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of FormPipe Software and Citigroup.
Diversification Opportunities for FormPipe Software and Citigroup
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FormPipe and Citigroup is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding FormPipe Software AB and Citigroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup and FormPipe Software 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 FormPipe Software AB 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 FormPipe Software i.e., FormPipe Software and Citigroup go up and down completely randomly.
Pair Corralation between FormPipe Software and Citigroup
Assuming the 90 days trading horizon FormPipe Software is expected to generate 4.0 times less return on investment than Citigroup. In addition to that, FormPipe Software is 1.45 times more volatile than Citigroup. It trades about 0.01 of its total potential returns per unit of risk. Citigroup is currently generating about 0.04 per unit of volatility. If you would invest 4,784 in Citigroup on January 26, 2024 and sell it today you would earn a total of 1,463 from holding Citigroup or generate 30.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.0% |
| Values | Daily Returns |
FormPipe Software AB vs. Citigroup
Performance |
| Timeline |
| FormPipe Software |
| Citigroup |
FormPipe Software and Citigroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FormPipe Software and Citigroup
The main advantage of trading using opposite FormPipe Software and Citigroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FormPipe Software 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.| FormPipe Software vs. Enzymatica publ AB | FormPipe Software vs. Polygiene AB | FormPipe Software vs. Sprint Bioscience AB | FormPipe Software vs. XMReality AB |
| Citigroup vs. Aquagold International | Citigroup vs. Thrivent High Yield | Citigroup vs. Morningstar Unconstrained Allocation | Citigroup vs. Via Renewables |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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