Correlation Between Citigroup and Baird Small/mid
Can any of the company-specific risk be diversified away by investing in both Citigroup and Baird Small/mid 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 Small/mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Baird Smallmid Cap, you can compare the effects of market volatilities on Citigroup and Baird Small/mid 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 Small/mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Baird Small/mid.
Diversification Opportunities for Citigroup and Baird Small/mid
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Citigroup and Baird is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Baird Smallmid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baird Smallmid Cap 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 Small/mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baird Smallmid Cap has no effect on the direction of Citigroup i.e., Citigroup and Baird Small/mid go up and down completely randomly.
Pair Corralation between Citigroup and Baird Small/mid
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.51 times more return on investment than Baird Small/mid. However, Citigroup is 1.51 times more volatile than Baird Smallmid Cap. It trades about 0.08 of its potential returns per unit of risk. Baird Smallmid Cap is currently generating about 0.04 per unit of risk. If you would invest 4,525 in Citigroup on August 31, 2024 and sell it today you would earn a total of 2,562 from holding Citigroup or generate 56.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.73% |
| Values | Daily Returns |
Citigroup vs. Baird Smallmid Cap
Performance |
| Timeline |
| Citigroup |
| Baird Smallmid Cap |
Citigroup and Baird Small/mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Baird Small/mid
The main advantage of trading using opposite Citigroup and Baird Small/mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Baird Small/mid 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 Small/mid will offset losses from the drop in Baird Small/mid's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Baird Small/mid vs. T Rowe Price | Baird Small/mid vs. T Rowe Price | Baird Small/mid vs. T Rowe Price | Baird Small/mid vs. T Rowe Price |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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