Correlation Between Citigroup and One Choice
Can any of the company-specific risk be diversified away by investing in both Citigroup and One Choice 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 One Choice into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and One Choice Portfolio, you can compare the effects of market volatilities on Citigroup and One Choice 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 One Choice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and One Choice.
Diversification Opportunities for Citigroup and One Choice
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Citigroup and One is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and One Choice Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Choice Portfolio 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 One Choice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Choice Portfolio has no effect on the direction of Citigroup i.e., Citigroup and One Choice go up and down completely randomly.
Pair Corralation between Citigroup and One Choice
Taking into account the 90-day investment horizon Citigroup is expected to generate 6.81 times more return on investment than One Choice. However, Citigroup is 6.81 times more volatile than One Choice Portfolio. It trades about 0.21 of its potential returns per unit of risk. One Choice Portfolio is currently generating about 0.02 per unit of risk. If you would invest 6,255 in Citigroup on August 24, 2024 and sell it today you would earn a total of 640.00 from holding Citigroup or generate 10.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Citigroup vs. One Choice Portfolio
Performance |
| Timeline |
| Citigroup |
| One Choice Portfolio |
Citigroup and One Choice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and One Choice
The main advantage of trading using opposite Citigroup and One Choice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, One Choice 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 One Choice will offset losses from the drop in One Choice's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| One Choice vs. One Choice Portfolio | One Choice vs. One Choice Portfolio | One Choice vs. One Choice Portfolio | One Choice vs. One Choice Portfolio |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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