Correlation Between Citigroup and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Citigroup and Sterling Capital 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 Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Sterling Capital Intermediate, you can compare the effects of market volatilities on Citigroup and Sterling Capital 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 Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Sterling Capital.
Diversification Opportunities for Citigroup and Sterling Capital
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and Sterling is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Sterling Capital Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Int 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 Sterling Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Capital Int has no effect on the direction of Citigroup i.e., Citigroup and Sterling Capital go up and down completely randomly.
Pair Corralation between Citigroup and Sterling Capital
Taking into account the 90-day investment horizon Citigroup is expected to generate 8.49 times more return on investment than Sterling Capital. However, Citigroup is 8.49 times more volatile than Sterling Capital Intermediate. It trades about 0.21 of its potential returns per unit of risk. Sterling Capital Intermediate is currently generating about -0.12 per unit of risk. If you would invest 5,683 in Citigroup on September 12, 2024 and sell it today you would earn a total of 1,567 from holding Citigroup or generate 27.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Citigroup vs. Sterling Capital Intermediate
Performance |
| Timeline |
| Citigroup |
| Sterling Capital Int |
Citigroup and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Sterling Capital
The main advantage of trading using opposite Citigroup and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Sterling Capital 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 Sterling Capital will offset losses from the drop in Sterling Capital's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Sterling Capital vs. Touchstone Ultra Short | Sterling Capital vs. Angel Oak Ultrashort | Sterling Capital vs. Kentucky Tax Free Short To Medium | Sterling Capital vs. Siit Ultra Short |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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