Correlation Between Zimmer Biomet and Citigroup
Can any of the company-specific risk be diversified away by investing in both Zimmer Biomet 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 Zimmer Biomet and Citigroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zimmer Biomet Holdings and Citigroup, you can compare the effects of market volatilities on Zimmer Biomet 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 Zimmer Biomet with a short position of Citigroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zimmer Biomet and Citigroup.
Diversification Opportunities for Zimmer Biomet and Citigroup
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Zimmer and Citigroup is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Zimmer Biomet Holdings and Citigroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup and Zimmer Biomet 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 Zimmer Biomet Holdings 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 Zimmer Biomet i.e., Zimmer Biomet and Citigroup go up and down completely randomly.
Pair Corralation between Zimmer Biomet and Citigroup
Considering the 90-day investment horizon Zimmer Biomet Holdings is expected to under-perform the Citigroup. But the stock apears to be less risky and, when comparing its historical volatility, Zimmer Biomet Holdings is 1.13 times less risky than Citigroup. The stock trades about -0.16 of its potential returns per unit of risk. The Citigroup is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 6,166 in Citigroup on January 26, 2024 and sell it today you would earn a total of 81.00 from holding Citigroup or generate 1.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zimmer Biomet Holdings vs. Citigroup
Performance |
| Timeline |
| Zimmer Biomet Holdings |
| Citigroup |
Zimmer Biomet and Citigroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zimmer Biomet and Citigroup
The main advantage of trading using opposite Zimmer Biomet and Citigroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zimmer Biomet 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.The idea behind Zimmer Biomet Holdings and Citigroup pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |