Correlation Between Citigroup and Hennessy Small
Can any of the company-specific risk be diversified away by investing in both Citigroup and Hennessy Small 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 Hennessy Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Hennessy Small Cap, you can compare the effects of market volatilities on Citigroup and Hennessy Small 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 Hennessy Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Hennessy Small.
Diversification Opportunities for Citigroup and Hennessy Small
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Hennessy is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Hennessy Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hennessy Small Cap 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 Hennessy Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hennessy Small Cap has no effect on the direction of Citigroup i.e., Citigroup and Hennessy Small go up and down completely randomly.
Pair Corralation between Citigroup and Hennessy Small
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.84 times more return on investment than Hennessy Small. However, Citigroup is 1.19 times less risky than Hennessy Small. It trades about 0.06 of its potential returns per unit of risk. Hennessy Small Cap is currently generating about -0.01 per unit of risk. If you would invest 9,204 in Citigroup on July 20, 2025 and sell it today you would earn a total of 503.00 from holding Citigroup or generate 5.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Hennessy Small Cap
Performance |
| Timeline |
| Citigroup |
| Hennessy Small Cap |
Citigroup and Hennessy Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Hennessy Small
The main advantage of trading using opposite Citigroup and Hennessy Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Hennessy Small 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 Hennessy Small will offset losses from the drop in Hennessy Small's long position.| Citigroup vs. Barclays PLC ADR | Citigroup vs. UBS Group AG | Citigroup vs. ING Group NV | Citigroup vs. Royal Bank of |
| Hennessy Small vs. Templeton Global Balanced | Hennessy Small vs. Rbc Bluebay Global | Hennessy Small vs. Dreyfusstandish Global Fixed | Hennessy Small vs. Summit Global Investments |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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