Correlation Between Citigroup and Spark Networks
Can any of the company-specific risk be diversified away by investing in both Citigroup and Spark Networks 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 Spark Networks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Spark Networks SE, you can compare the effects of market volatilities on Citigroup and Spark Networks 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 Spark Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Spark Networks.
Diversification Opportunities for Citigroup and Spark Networks
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Spark is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Spark Networks SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spark Networks SE 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 Spark Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spark Networks SE has no effect on the direction of Citigroup i.e., Citigroup and Spark Networks go up and down completely randomly.
Pair Corralation between Citigroup and Spark Networks
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.1 times more return on investment than Spark Networks. However, Citigroup is 9.67 times less risky than Spark Networks. It trades about 0.08 of its potential returns per unit of risk. Spark Networks SE is currently generating about -0.05 per unit of risk. If you would invest 4,259 in Citigroup on January 30, 2024 and sell it today you would earn a total of 2,007 from holding Citigroup or generate 47.12% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 67.14% |
Values | Daily Returns |
Citigroup vs. Spark Networks SE
Performance |
Timeline |
Citigroup |
Spark Networks SE |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Citigroup and Spark Networks Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Citigroup and Spark Networks
The main advantage of trading using opposite Citigroup and Spark Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Spark Networks 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 Spark Networks will offset losses from the drop in Spark Networks' long position.Citigroup vs. BlueRush | Citigroup vs. Fidelity Freedom Blend | Citigroup vs. HP Inc | Citigroup vs. U Power Limited |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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