Correlation Between Citigroup and Barings Global
Can any of the company-specific risk be diversified away by investing in both Citigroup and Barings 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 Barings Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Barings Global Floating, you can compare the effects of market volatilities on Citigroup and Barings 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 Barings Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Barings Global.
Diversification Opportunities for Citigroup and Barings Global
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Barings is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Barings Global Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings Global Floating 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 Barings Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings Global Floating has no effect on the direction of Citigroup i.e., Citigroup and Barings Global go up and down completely randomly.
Pair Corralation between Citigroup and Barings Global
Taking into account the 90-day investment horizon Citigroup is expected to generate 18.49 times more return on investment than Barings Global. However, Citigroup is 18.49 times more volatile than Barings Global Floating. It trades about 0.25 of its potential returns per unit of risk. Barings Global Floating is currently generating about 0.3 per unit of risk. If you would invest 6,360 in Citigroup on August 28, 2024 and sell it today you would earn a total of 715.00 from holding Citigroup or generate 11.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Citigroup vs. Barings Global Floating
Performance |
| Timeline |
| Citigroup |
| Barings Global Floating |
Citigroup and Barings Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Barings Global
The main advantage of trading using opposite Citigroup and Barings Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Barings 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 Barings Global will offset losses from the drop in Barings Global's long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
| Barings Global vs. Barings Active Short | Barings Global vs. Barings Emerging Markets | Barings Global vs. Barings Emerging Markets | Barings Global vs. Barings Active Short |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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