Correlation Between Citigroup and Quadratic Deflation
Can any of the company-specific risk be diversified away by investing in both Citigroup and Quadratic Deflation 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 Quadratic Deflation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Quadratic Deflation ETF, you can compare the effects of market volatilities on Citigroup and Quadratic Deflation 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 Quadratic Deflation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Quadratic Deflation.
Diversification Opportunities for Citigroup and Quadratic Deflation
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Quadratic is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Quadratic Deflation ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quadratic Deflation ETF 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 Quadratic Deflation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quadratic Deflation ETF has no effect on the direction of Citigroup i.e., Citigroup and Quadratic Deflation go up and down completely randomly.
Pair Corralation between Citigroup and Quadratic Deflation
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.35 times more return on investment than Quadratic Deflation. However, Citigroup is 2.35 times more volatile than Quadratic Deflation ETF. It trades about 0.07 of its potential returns per unit of risk. Quadratic Deflation ETF is currently generating about -0.01 per unit of risk. If you would invest 6,117 in Citigroup on August 29, 2024 and sell it today you would earn a total of 899.00 from holding Citigroup or generate 14.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Quadratic Deflation ETF
Performance |
| Timeline |
| Citigroup |
| Quadratic Deflation ETF |
Citigroup and Quadratic Deflation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Quadratic Deflation
The main advantage of trading using opposite Citigroup and Quadratic Deflation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Quadratic Deflation 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 Quadratic Deflation will offset losses from the drop in Quadratic Deflation's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Quadratic Deflation vs. SPDR Barclays Short | Quadratic Deflation vs. SPDR Portfolio Intermediate | Quadratic Deflation vs. SPDR Barclays Long | Quadratic Deflation vs. SPDR Barclays Intermediate |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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