Correlation Between Citigroup and Brandes Global
Can any of the company-specific risk be diversified away by investing in both Citigroup and Brandes Global 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 Brandes Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Brandes Global Equity, you can compare the effects of market volatilities on Citigroup and Brandes Global 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 Brandes Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Brandes Global.
Diversification Opportunities for Citigroup and Brandes Global
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Brandes is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Brandes Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brandes Global Equity 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 Brandes Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brandes Global Equity has no effect on the direction of Citigroup i.e., Citigroup and Brandes Global go up and down completely randomly.
Pair Corralation between Citigroup and Brandes Global
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.96 times more return on investment than Brandes Global. However, Citigroup is 2.96 times more volatile than Brandes Global Equity. It trades about 0.29 of its potential returns per unit of risk. Brandes Global Equity is currently generating about 0.08 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Brandes Global Equity
Performance |
| Timeline |
| Citigroup |
| Brandes Global Equity |
Citigroup and Brandes Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Brandes Global
The main advantage of trading using opposite Citigroup and Brandes Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Brandes Global 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 Brandes Global will offset losses from the drop in Brandes Global's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| Brandes Global vs. Brandes International Equity | Brandes Global vs. Brandes International Equity | Brandes Global vs. Brandes International Equity | Brandes Global vs. Brandes International Equity |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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