Correlation Between Medical Facilities and CITIGROUP CDR
Can any of the company-specific risk be diversified away by investing in both Medical Facilities and CITIGROUP CDR 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 Medical Facilities and CITIGROUP CDR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medical Facilities and CITIGROUP CDR, you can compare the effects of market volatilities on Medical Facilities and CITIGROUP CDR 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 Medical Facilities with a short position of CITIGROUP CDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medical Facilities and CITIGROUP CDR.
Diversification Opportunities for Medical Facilities and CITIGROUP CDR
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Medical and CITIGROUP is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Medical Facilities and CITIGROUP CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIGROUP CDR and Medical Facilities 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 Medical Facilities are associated (or correlated) with CITIGROUP CDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIGROUP CDR has no effect on the direction of Medical Facilities i.e., Medical Facilities and CITIGROUP CDR go up and down completely randomly.
Pair Corralation between Medical Facilities and CITIGROUP CDR
Assuming the 90 days horizon Medical Facilities is expected to under-perform the CITIGROUP CDR. But the stock apears to be less risky and, when comparing its historical volatility, Medical Facilities is 1.17 times less risky than CITIGROUP CDR. The stock trades about -0.01 of its potential returns per unit of risk. The CITIGROUP CDR is currently generating about 0.58 of returns per unit of risk over similar time horizon. If you would invest 3,334 in CITIGROUP CDR on April 24, 2025 and sell it today you would earn a total of 685.00 from holding CITIGROUP CDR or generate 20.55% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Medical Facilities vs. CITIGROUP CDR
Performance |
Timeline |
Medical Facilities |
CITIGROUP CDR |
Medical Facilities and CITIGROUP CDR Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Medical Facilities and CITIGROUP CDR
The main advantage of trading using opposite Medical Facilities and CITIGROUP CDR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medical Facilities position performs unexpectedly, CITIGROUP CDR 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 CDR will offset losses from the drop in CITIGROUP CDR's long position.Medical Facilities vs. Extendicare | Medical Facilities vs. Sienna Senior Living | Medical Facilities vs. Rogers Sugar | Medical Facilities vs. Chemtrade Logistics Income |
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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