Correlation Between Citigroup and Berwyn Income
Can any of the company-specific risk be diversified away by investing in both Citigroup and Berwyn Income 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 Berwyn Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Berwyn Income Fund, you can compare the effects of market volatilities on Citigroup and Berwyn Income 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 Berwyn Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Berwyn Income.
Diversification Opportunities for Citigroup and Berwyn Income
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Citigroup and Berwyn is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Berwyn Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berwyn Income 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 Berwyn Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berwyn Income has no effect on the direction of Citigroup i.e., Citigroup and Berwyn Income go up and down completely randomly.
Pair Corralation between Citigroup and Berwyn Income
Taking into account the 90-day investment horizon Citigroup is expected to generate 7.39 times more return on investment than Berwyn Income. However, Citigroup is 7.39 times more volatile than Berwyn Income Fund. It trades about 0.29 of its potential returns per unit of risk. Berwyn Income Fund is currently generating about 0.06 per unit of risk. If you would invest 6,122 in Citigroup on August 26, 2024 and sell it today you would earn a total of 862.00 from holding Citigroup or generate 14.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Berwyn Income Fund
Performance |
| Timeline |
| Citigroup |
| Berwyn Income |
Citigroup and Berwyn Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Berwyn Income
The main advantage of trading using opposite Citigroup and Berwyn Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Berwyn Income 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 Berwyn Income will offset losses from the drop in Berwyn Income's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| Berwyn Income vs. Saat Moderate Strategy | Berwyn Income vs. Moderately Aggressive Balanced | Berwyn Income vs. Fidelity Managed Retirement | Berwyn Income vs. Blackrock Moderate Prepared |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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