Correlation Between Citigroup and CIBC Active
Can any of the company-specific risk be diversified away by investing in both Citigroup and CIBC Active 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 CIBC Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and CIBC Active Investment, you can compare the effects of market volatilities on Citigroup and CIBC Active 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 CIBC Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and CIBC Active.
Diversification Opportunities for Citigroup and CIBC Active
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and CIBC is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and CIBC Active Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIBC Active Investment 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 CIBC Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIBC Active Investment has no effect on the direction of Citigroup i.e., Citigroup and CIBC Active go up and down completely randomly.
Pair Corralation between Citigroup and CIBC Active
Taking into account the 90-day investment horizon Citigroup is expected to generate 20.89 times more return on investment than CIBC Active. However, Citigroup is 20.89 times more volatile than CIBC Active Investment. It trades about 0.26 of its potential returns per unit of risk. CIBC Active Investment is currently generating about 0.2 per unit of risk. If you would invest 6,361 in Citigroup on September 1, 2024 and sell it today you would earn a total of 726.00 from holding Citigroup or generate 11.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 91.3% |
| Values | Daily Returns |
Citigroup vs. CIBC Active Investment
Performance |
| Timeline |
| Citigroup |
| CIBC Active Investment |
Citigroup and CIBC Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and CIBC Active
The main advantage of trading using opposite Citigroup and CIBC Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, CIBC Active 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 CIBC Active will offset losses from the drop in CIBC Active's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| CIBC Active vs. CIBC Active Investment | CIBC Active vs. CIBC Flexible Yield | CIBC Active vs. CIBC Core Fixed | CIBC Active vs. Brompton Flaherty Crumrine |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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