Correlation Between Citigroup and ETRACS Quarterly
Can any of the company-specific risk be diversified away by investing in both Citigroup and ETRACS Quarterly 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 ETRACS Quarterly into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and ETRACS Quarterly Pay, you can compare the effects of market volatilities on Citigroup and ETRACS Quarterly 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 ETRACS Quarterly. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and ETRACS Quarterly.
Diversification Opportunities for Citigroup and ETRACS Quarterly
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and ETRACS is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and ETRACS Quarterly Pay in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETRACS Quarterly Pay 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 ETRACS Quarterly. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETRACS Quarterly Pay has no effect on the direction of Citigroup i.e., Citigroup and ETRACS Quarterly go up and down completely randomly.
Pair Corralation between Citigroup and ETRACS Quarterly
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.63 times more return on investment than ETRACS Quarterly. However, Citigroup is 1.63 times more volatile than ETRACS Quarterly Pay. It trades about 0.07 of its potential returns per unit of risk. ETRACS Quarterly Pay is currently generating about 0.01 per unit of risk. If you would invest 6,079 in Citigroup on August 31, 2024 and sell it today you would earn a total of 1,008 from holding Citigroup or generate 16.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. ETRACS Quarterly Pay
Performance |
| Timeline |
| Citigroup |
| ETRACS Quarterly Pay |
Citigroup and ETRACS Quarterly Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and ETRACS Quarterly
The main advantage of trading using opposite Citigroup and ETRACS Quarterly positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, ETRACS Quarterly 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 ETRACS Quarterly will offset losses from the drop in ETRACS Quarterly's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| ETRACS Quarterly vs. ETRACS Monthly Pay | ETRACS Quarterly vs. ETRACS Monthly Pay | ETRACS Quarterly vs. ETRACS Monthly Pay | ETRACS Quarterly vs. iShares Trust |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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