Correlation Between Citigroup and Baron New
Can any of the company-specific risk be diversified away by investing in both Citigroup and Baron New 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 Baron New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Baron New Asia, you can compare the effects of market volatilities on Citigroup and Baron New 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 Baron New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Baron New.
Diversification Opportunities for Citigroup and Baron New
Good diversification
The 3 months correlation between Citigroup and Baron is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Baron New Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron New Asia 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 Baron New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron New Asia has no effect on the direction of Citigroup i.e., Citigroup and Baron New go up and down completely randomly.
Pair Corralation between Citigroup and Baron New
Taking into account the 90-day investment horizon Citigroup is expected to generate 3.09 times more return on investment than Baron New. However, Citigroup is 3.09 times more volatile than Baron New Asia. It trades about 0.26 of its potential returns per unit of risk. Baron New Asia is currently generating about -0.2 per unit of risk. If you would invest 6,361 in Citigroup on September 1, 2024 and sell it today you would earn a total of 726.00 from holding Citigroup or generate 11.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 19.05% |
| Values | Daily Returns |
Citigroup vs. Baron New Asia
Performance |
| Timeline |
| Citigroup |
| Baron New Asia |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Citigroup and Baron New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Baron New
The main advantage of trading using opposite Citigroup and Baron New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Baron New 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 Baron New will offset losses from the drop in Baron New's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Baron New vs. Vanguard Growth And | Baron New vs. Small Pany Growth | Baron New vs. Tfa Alphagen Growth | Baron New vs. L Abbett Growth |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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