Correlation Between Canada Goose and CITIGROUP

Can any of the company-specific risk be diversified away by investing in both Canada Goose 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 Canada Goose and CITIGROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Canada Goose Holdings and CITIGROUP INC 43, you can compare the effects of market volatilities on Canada Goose 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 Canada Goose with a short position of CITIGROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canada Goose and CITIGROUP.

Diversification Opportunities for Canada Goose and CITIGROUP

0.28

Correlation Coefficient

Canada Goose  CITIGROUP

Modest diversification

The 3 months correlation between Canada and CITIGROUP is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Canada Goose Holdings and CITIGROUP INC 43 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIGROUP INC 43 and Canada Goose 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 Canada Goose 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 INC 43 has no effect on the direction of Canada Goose i.e., Canada Goose and CITIGROUP go up and down completely randomly.

Pair Corralation between Canada Goose and CITIGROUP

Given the investment horizon of 90 days Canada Goose Holdings is expected to generate 3.16 times more return on investment than CITIGROUP. However, Canada Goose is 3.16 times more volatile than CITIGROUP INC 43. It trades about -0.01 of its potential returns per unit of risk. CITIGROUP INC 43 is currently generating about -0.04 per unit of risk. If you would invest  1,035  in Canada Goose Holdings on September 12, 2024 and sell it today you would lose (40.00) from holding Canada Goose Holdings or give up 3.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.88%
Values	Daily Returns

Canada Goose Holdings  vs.  CITIGROUP INC 43

Canada Goose Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Canada Goose Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Canada Goose is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

CITIGROUP INC 43

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CITIGROUP INC 43 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, CITIGROUP is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Canada Goose and CITIGROUP

The main advantage of trading using opposite Canada Goose and CITIGROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canada Goose 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 Canada Goose Holdings and CITIGROUP INC 43 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.

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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 CEOs Directory module to screen CEOs from public companies around the world.