Correlation Between Citigroup and Baird Core
Can any of the company-specific risk be diversified away by investing in both Citigroup and Baird 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 Baird Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Baird E Intermediate, you can compare the effects of market volatilities on Citigroup and Baird 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 Baird Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Baird Core.
Diversification Opportunities for Citigroup and Baird Core
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Baird is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Baird E Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baird E Intermediate 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 Baird Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baird E Intermediate has no effect on the direction of Citigroup i.e., Citigroup and Baird Core go up and down completely randomly.
Pair Corralation between Citigroup and Baird Core
Taking into account the 90-day investment horizon Citigroup is expected to generate 10.4 times more return on investment than Baird Core. However, Citigroup is 10.4 times more volatile than Baird E Intermediate. It trades about 0.07 of its potential returns per unit of risk. Baird E Intermediate is currently generating about 0.1 per unit of risk. If you would invest 4,206 in Citigroup on August 26, 2024 and sell it today you would earn a total of 2,778 from holding Citigroup or generate 66.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Baird E Intermediate
Performance |
| Timeline |
| Citigroup |
| Baird E Intermediate |
Citigroup and Baird Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Baird Core
The main advantage of trading using opposite Citigroup and Baird Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Baird 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 Baird Core will offset losses from the drop in Baird Core's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| Baird Core vs. Baird Aggregate Bond | Baird Core vs. Baird Aggregate Bond | Baird Core vs. Baird Short Term Bond | Baird Core vs. Baird Short Term Bond |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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