Correlation Between Bed Bath and Citigroup

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Bed Bath 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 Bed Bath and Citigroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bed Bath Beyond and Citigroup, you can compare the effects of market volatilities on Bed Bath 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 Bed Bath with a short position of Citigroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bed Bath and Citigroup.

Diversification Opportunities for Bed Bath and Citigroup

0.47
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Bed Bath and Citigroup is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Bed Bath Beyond and Citigroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup and Bed Bath 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 Bed Bath Beyond 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 Bed Bath i.e., Bed Bath and Citigroup go up and down completely randomly.

Pair Corralation between Bed Bath and Citigroup

Given the investment horizon of 90 days Bed Bath Beyond is expected to generate 2.72 times more return on investment than Citigroup. However, Bed Bath is 2.72 times more volatile than Citigroup. It trades about -0.04 of its potential returns per unit of risk. Citigroup is currently generating about -0.18 per unit of risk. If you would invest  704.00  in Bed Bath Beyond on July 6, 2022 and sell it today you would lose (51.00)  from holding Bed Bath Beyond or give up 7.24% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Bed Bath Beyond  vs.  Citigroup

 Performance (%) 
       Timeline  
Bed Bath Beyond 
Bed Bath Performance
8 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Bed Bath Beyond are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental drivers, Bed Bath showed solid returns over the last few months and may actually be approaching a breakup point.

Bed Bath 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 somewhat strong fundamental indicators, Citigroup is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Citigroup Price Channel

Bed Bath and Citigroup Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bed Bath and Citigroup

The main advantage of trading using opposite Bed Bath and Citigroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bed Bath 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.
Bed Bath vs. Best Buy Company
The idea behind Bed Bath Beyond 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.

Other Complementary Tools

Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Go
Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities
Go
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Go
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings
Go
Equity Valuation
Check real value of public entities based on technical and fundamental data
Go
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Go
Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
Go
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Go
Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Go