Correlation Between Citigroup and Cambiar Opportunity
Can any of the company-specific risk be diversified away by investing in both Citigroup and Cambiar Opportunity 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 Cambiar Opportunity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Cambiar Opportunity Fund, you can compare the effects of market volatilities on Citigroup and Cambiar Opportunity 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 Cambiar Opportunity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Cambiar Opportunity.
Diversification Opportunities for Citigroup and Cambiar Opportunity
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Citigroup and Cambiar is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Cambiar Opportunity Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambiar Opportunity 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 Cambiar Opportunity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambiar Opportunity has no effect on the direction of Citigroup i.e., Citigroup and Cambiar Opportunity go up and down completely randomly.
Pair Corralation between Citigroup and Cambiar Opportunity
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.41 times more return on investment than Cambiar Opportunity. However, Citigroup is 1.41 times more volatile than Cambiar Opportunity Fund. It trades about 0.07 of its potential returns per unit of risk. Cambiar Opportunity Fund is currently generating about 0.05 per unit of risk. If you would invest 4,134 in Citigroup on August 30, 2024 and sell it today you would earn a total of 2,882 from holding Citigroup or generate 69.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Cambiar Opportunity Fund
Performance |
| Timeline |
| Citigroup |
| Cambiar Opportunity |
Citigroup and Cambiar Opportunity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Cambiar Opportunity
The main advantage of trading using opposite Citigroup and Cambiar Opportunity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Cambiar Opportunity 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 Cambiar Opportunity will offset losses from the drop in Cambiar Opportunity's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Cambiar Opportunity vs. Dodge Cox Stock | Cambiar Opportunity vs. American Mutual Fund | Cambiar Opportunity vs. American Funds American | Cambiar Opportunity vs. American Funds American |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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