Correlation Between Citigroup and Invesco Growth
Can any of the company-specific risk be diversified away by investing in both Citigroup and Invesco Growth 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 Invesco Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Invesco Growth Allocation, you can compare the effects of market volatilities on Citigroup and Invesco Growth 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 Invesco Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Invesco Growth.
Diversification Opportunities for Citigroup and Invesco Growth
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Invesco is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Invesco Growth Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Growth 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 Invesco Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Growth Allocation has no effect on the direction of Citigroup i.e., Citigroup and Invesco Growth go up and down completely randomly.
Pair Corralation between Citigroup and Invesco Growth
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.8 times more return on investment than Invesco Growth. However, Citigroup is 2.8 times more volatile than Invesco Growth Allocation. It trades about 0.06 of its potential returns per unit of risk. Invesco Growth Allocation is currently generating about 0.07 per unit of risk. If you would invest 6,008 in Citigroup on September 3, 2024 and sell it today you would earn a total of 1,079 from holding Citigroup or generate 17.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Invesco Growth Allocation
Performance |
| Timeline |
| Citigroup |
| Invesco Growth Allocation |
Citigroup and Invesco Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Invesco Growth
The main advantage of trading using opposite Citigroup and Invesco Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Invesco Growth 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 Invesco Growth will offset losses from the drop in Invesco Growth's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Invesco Growth vs. Ashmore Emerging Markets | Invesco Growth vs. Wilmington Funds | Invesco Growth vs. Lord Abbett Emerging | Invesco Growth vs. Matson Money Equity |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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