Correlation Between Citigroup and Global Growth
Can any of the company-specific risk be diversified away by investing in both Citigroup and Global 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 Global Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Global Growth Fund, you can compare the effects of market volatilities on Citigroup and Global 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 Global Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Global Growth.
Diversification Opportunities for Citigroup and Global Growth
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Citigroup and Global is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Global Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Growth 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 Global Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Growth has no effect on the direction of Citigroup i.e., Citigroup and Global Growth go up and down completely randomly.
Pair Corralation between Citigroup and Global Growth
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.13 times more return on investment than Global Growth. However, Citigroup is 1.13 times more volatile than Global Growth Fund. It trades about 0.2 of its potential returns per unit of risk. Global Growth Fund is currently generating about -0.02 per unit of risk. If you would invest 6,902 in Citigroup on September 13, 2024 and sell it today you would earn a total of 241.00 from holding Citigroup or generate 3.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Global Growth Fund
Performance |
| Timeline |
| Citigroup |
| Global Growth |
Citigroup and Global Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Global Growth
The main advantage of trading using opposite Citigroup and Global Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Global 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 Global Growth will offset losses from the drop in Global Growth's long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
| Global Growth vs. Angel Oak Financial | Global Growth vs. Goldman Sachs Financial | Global Growth vs. John Hancock Financial | Global Growth vs. Gabelli Global Financial |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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