Correlation Between Hp and Citigroup

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Can any of the company-specific risk be diversified away by investing in both Hp 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 Hp and Citigroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hp Inc and Citigroup, you can compare the effects of market volatilities on Hp 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 Hp with a short position of Citigroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hp and Citigroup.

Diversification Opportunities for Hp and Citigroup

0.74
  Correlation Coefficient

Poor diversification

The 3 months correlation between Hp and Citigroup is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Hp Inc and Citigroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup and Hp 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 Hp Inc 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 Hp i.e., Hp and Citigroup go up and down completely randomly.

Pair Corralation between Hp and Citigroup

Considering the 90-day investment horizon Hp Inc is expected to generate 1.05 times more return on investment than Citigroup. However, Hp is 1.05 times more volatile than Citigroup. It trades about -0.31 of its potential returns per unit of risk. Citigroup is currently generating about -0.43 per unit of risk. If you would invest  2,817  in Hp Inc on July 3, 2022 and sell it today you would lose (325.00)  from holding Hp Inc or give up 11.54% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Hp Inc  vs.  Citigroup

 Performance (%) 
       Timeline  
Hp Inc 
Hp Performance
0 of 100
Over the last 90 days Hp Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in November 2022. The recent disarray may also be a sign of long period up-swing for the firm insiders.

Hp Price Channel

Citigroup 
Citigroup Performance
0 of 100
Over the last 90 days Citigroup has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Citigroup Price Channel

Hp and Citigroup Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Hp and Citigroup

The main advantage of trading using opposite Hp and Citigroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hp 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.
Hp vs. Amazon Inc
The idea behind Hp Inc 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. Amazon Inc
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.

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