Correlation Between Citigroup and Strategic Allocation:
Can any of the company-specific risk be diversified away by investing in both Citigroup and Strategic Allocation: 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 Strategic Allocation: into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Strategic Allocation Servative, you can compare the effects of market volatilities on Citigroup and Strategic Allocation: 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 Strategic Allocation:. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Strategic Allocation:.
Diversification Opportunities for Citigroup and Strategic Allocation:
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citigroup and Strategic is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Strategic Allocation Servative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Allocation: 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 Strategic Allocation:. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Allocation: has no effect on the direction of Citigroup i.e., Citigroup and Strategic Allocation: go up and down completely randomly.
Pair Corralation between Citigroup and Strategic Allocation:
Taking into account the 90-day investment horizon Citigroup is expected to generate 5.84 times more return on investment than Strategic Allocation:. However, Citigroup is 5.84 times more volatile than Strategic Allocation Servative. It trades about 0.23 of its potential returns per unit of risk. Strategic Allocation Servative is currently generating about 0.19 per unit of risk. If you would invest 6,360 in Citigroup on August 27, 2024 and sell it today you would earn a total of 624.00 from holding Citigroup or generate 9.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Strategic Allocation Servative
Performance |
| Timeline |
| Citigroup |
| Strategic Allocation: |
Citigroup and Strategic Allocation: Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Strategic Allocation:
The main advantage of trading using opposite Citigroup and Strategic Allocation: positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Strategic Allocation: 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 Strategic Allocation: will offset losses from the drop in Strategic Allocation:'s long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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