Correlation Between Citigroup and Methode Electronics
Can any of the company-specific risk be diversified away by investing in both Citigroup and Methode Electronics 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 Methode Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Methode Electronics, you can compare the effects of market volatilities on Citigroup and Methode Electronics 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 Methode Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Methode Electronics.
Diversification Opportunities for Citigroup and Methode Electronics
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Citigroup and Methode is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Methode Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Methode Electronics 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 Methode Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Methode Electronics has no effect on the direction of Citigroup i.e., Citigroup and Methode Electronics go up and down completely randomly.
Pair Corralation between Citigroup and Methode Electronics
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.77 times less return on investment than Methode Electronics. But when comparing it to its historical volatility, Citigroup is 2.23 times less risky than Methode Electronics. It trades about 0.07 of its potential returns per unit of risk. Methode Electronics is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 566.00 in Methode Electronics on August 22, 2025 and sell it today you would earn a total of 44.00 from holding Methode Electronics or generate 7.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Citigroup vs. Methode Electronics
Performance |
| Timeline |
| Citigroup |
| Methode Electronics |
Citigroup and Methode Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Methode Electronics
The main advantage of trading using opposite Citigroup and Methode Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Methode Electronics 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 Methode Electronics will offset losses from the drop in Methode Electronics' long position.| Citigroup vs. Mitsubishi UFJ Financial | Citigroup vs. Royal Bank of | Citigroup vs. Wells Fargo | Citigroup vs. Bank of America |
| Methode Electronics vs. Agilent Technologies | Methode Electronics vs. PKSHA TECHNOLOGY INC | Methode Electronics vs. Wenzhou Kangning Hospital | Methode Electronics vs. Theralase Technologies |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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