Correlation Between Citigroup and Purpose Global
Can any of the company-specific risk be diversified away by investing in both Citigroup and Purpose 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 Purpose Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Purpose Global Bond, you can compare the effects of market volatilities on Citigroup and Purpose 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 Purpose Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Purpose Global.
Diversification Opportunities for Citigroup and Purpose Global
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citigroup and Purpose is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Purpose Global Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Purpose Global Bond 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 Purpose Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Purpose Global Bond has no effect on the direction of Citigroup i.e., Citigroup and Purpose Global go up and down completely randomly.
Pair Corralation between Citigroup and Purpose Global
Taking into account the 90-day investment horizon Citigroup is expected to generate 8.53 times more return on investment than Purpose Global. However, Citigroup is 8.53 times more volatile than Purpose Global Bond. It trades about 0.21 of its potential returns per unit of risk. Purpose Global Bond is currently generating about 0.04 per unit of risk. If you would invest 6,360 in Citigroup on August 29, 2024 and sell it today you would earn a total of 615.00 from holding Citigroup or generate 9.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Purpose Global Bond
Performance |
| Timeline |
| Citigroup |
| Purpose Global Bond |
Citigroup and Purpose Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Purpose Global
The main advantage of trading using opposite Citigroup and Purpose Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Purpose 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 Purpose Global will offset losses from the drop in Purpose Global's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Purpose Global vs. Dynamic Active Preferred | Purpose Global vs. Mackenzie Floating Rate | Purpose Global vs. Purpose Total Return | Purpose Global vs. Purpose Core Dividend |
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.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |