Correlation Between Citigroup and Baron Real
Can any of the company-specific risk be diversified away by investing in both Citigroup and Baron Real 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 Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Baron Real Estate, you can compare the effects of market volatilities on Citigroup and Baron Real 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 Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Baron Real.
Diversification Opportunities for Citigroup and Baron Real
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Baron is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Baron Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Real Estate 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 Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Real Estate has no effect on the direction of Citigroup i.e., Citigroup and Baron Real go up and down completely randomly.
Pair Corralation between Citigroup and Baron Real
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.4 times more return on investment than Baron Real. However, Citigroup is 1.4 times more volatile than Baron Real Estate. It trades about 0.07 of its potential returns per unit of risk. Baron Real Estate is currently generating about 0.07 per unit of risk. If you would invest 4,206 in Citigroup on August 25, 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 Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Baron Real Estate
Performance |
| Timeline |
| Citigroup |
| Baron Real Estate |
Citigroup and Baron Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Baron Real
The main advantage of trading using opposite Citigroup and Baron Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Baron Real 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 Real will offset losses from the drop in Baron Real's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| Baron Real vs. Baron Partners Fund | Baron Real vs. Wells Fargo Advantage | Baron Real vs. Invesco Real Estate | Baron Real vs. Baird Intermediate 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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