Correlation Between Citigroup and Invesco Equity
Can any of the company-specific risk be diversified away by investing in both Citigroup and Invesco Equity 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 Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Invesco Equity And, you can compare the effects of market volatilities on Citigroup and Invesco Equity 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 Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Invesco Equity.
Diversification Opportunities for Citigroup and Invesco Equity
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Invesco is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Invesco Equity And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Equity And 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 Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Equity And has no effect on the direction of Citigroup i.e., Citigroup and Invesco Equity go up and down completely randomly.
Pair Corralation between Citigroup and Invesco Equity
Taking into account the 90-day investment horizon Citigroup is expected to generate 3.61 times more return on investment than Invesco Equity. However, Citigroup is 3.61 times more volatile than Invesco Equity And. It trades about 0.45 of its potential returns per unit of risk. Invesco Equity And is currently generating about 0.41 per unit of risk. If you would invest 6,994 in Citigroup on November 2, 2024 and sell it today you would earn a total of 1,192 from holding Citigroup or generate 17.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Citigroup vs. Invesco Equity And
Performance |
| Timeline |
| Citigroup |
| Invesco Equity And |
Citigroup and Invesco Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Invesco Equity
The main advantage of trading using opposite Citigroup and Invesco Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Invesco Equity 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 Equity will offset losses from the drop in Invesco Equity's long position.| Citigroup vs. Royal Bank of | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Canadian Imperial Bank |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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