Correlation Between Citigroup and Diversified Municipal
Can any of the company-specific risk be diversified away by investing in both Citigroup and Diversified Municipal 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 Diversified Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Diversified Municipal Portfolio, you can compare the effects of market volatilities on Citigroup and Diversified Municipal 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 Diversified Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Diversified Municipal.
Diversification Opportunities for Citigroup and Diversified Municipal
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and Diversified is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Diversified Municipal Portfoli in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diversified Municipal 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 Diversified Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diversified Municipal has no effect on the direction of Citigroup i.e., Citigroup and Diversified Municipal go up and down completely randomly.
Pair Corralation between Citigroup and Diversified Municipal
Taking into account the 90-day investment horizon Citigroup is expected to generate 11.53 times more return on investment than Diversified Municipal. However, Citigroup is 11.53 times more volatile than Diversified Municipal Portfolio. It trades about 0.07 of its potential returns per unit of risk. Diversified Municipal Portfolio is currently generating about 0.1 per unit of risk. If you would invest 4,206 in Citigroup on August 25, 2024 and sell it today you would earn a total of 2,778 from holding Citigroup or generate 66.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Diversified Municipal Portfoli
Performance |
| Timeline |
| Citigroup |
| Diversified Municipal |
Citigroup and Diversified Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Diversified Municipal
The main advantage of trading using opposite Citigroup and Diversified Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Diversified Municipal 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 Diversified Municipal will offset losses from the drop in Diversified Municipal's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| Diversified Municipal vs. Ab Global E | Diversified Municipal vs. Ab Global E | Diversified Municipal vs. Ab Minnesota Portfolio | Diversified Municipal vs. Ab All Market |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |