Correlation Between Citigroup and NanoTech Gaming
Can any of the company-specific risk be diversified away by investing in both Citigroup and NanoTech Gaming 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 Citigroup and NanoTech Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and NanoTech Gaming, you can compare the effects of market volatilities on Citigroup and NanoTech Gaming 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 NanoTech Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and NanoTech Gaming.
Diversification Opportunities for Citigroup and NanoTech Gaming
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Citigroup and NanoTech is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and NanoTech Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NanoTech Gaming 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 NanoTech Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NanoTech Gaming has no effect on the direction of Citigroup i.e., Citigroup and NanoTech Gaming go up and down completely randomly.
Pair Corralation between Citigroup and NanoTech Gaming
Taking into account the 90-day investment horizon Citigroup is expected to generate 43.5 times less return on investment than NanoTech Gaming. But when comparing it to its historical volatility, Citigroup is 44.39 times less risky than NanoTech Gaming. It trades about 0.07 of its potential returns per unit of risk. NanoTech Gaming is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 0.01 in NanoTech Gaming on September 18, 2024 and sell it today you would earn a total of 0.00 from holding NanoTech Gaming or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Citigroup vs. NanoTech Gaming
Performance |
Timeline |
Citigroup |
NanoTech Gaming |
Citigroup and NanoTech Gaming Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Citigroup and NanoTech Gaming
The main advantage of trading using opposite Citigroup and NanoTech Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, NanoTech Gaming 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 NanoTech Gaming will offset losses from the drop in NanoTech Gaming's long position.Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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