Correlation Between Citigroup and Avantis Core
Can any of the company-specific risk be diversified away by investing in both Citigroup and Avantis Core 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 Avantis Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Avantis Core Municipal, you can compare the effects of market volatilities on Citigroup and Avantis Core 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 Avantis Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Avantis Core.
Diversification Opportunities for Citigroup and Avantis Core
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Citigroup and Avantis is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Avantis Core Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avantis Core 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 Avantis Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avantis Core Municipal has no effect on the direction of Citigroup i.e., Citigroup and Avantis Core go up and down completely randomly.
Pair Corralation between Citigroup and Avantis Core
Taking into account the 90-day investment horizon Citigroup is expected to generate 5.46 times more return on investment than Avantis Core. However, Citigroup is 5.46 times more volatile than Avantis Core Municipal. It trades about 0.21 of its potential returns per unit of risk. Avantis Core Municipal is currently generating about 0.19 per unit of risk. If you would invest 6,393 in Citigroup on August 31, 2024 and sell it today you would earn a total of 623.00 from holding Citigroup or generate 9.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Avantis Core Municipal
Performance |
| Timeline |
| Citigroup |
| Avantis Core Municipal |
Citigroup and Avantis Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Avantis Core
The main advantage of trading using opposite Citigroup and Avantis Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Avantis Core 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 Avantis Core will offset losses from the drop in Avantis Core's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Avantis Core vs. Avantis Core Fixed | Avantis Core vs. American Century ETF | Avantis Core vs. American Century Diversified | Avantis Core vs. IQ MacKay Municipal |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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