Correlation Between Citigroup and Cornerstone Advisors
Can any of the company-specific risk be diversified away by investing in both Citigroup and Cornerstone Advisors 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 Cornerstone Advisors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Cornerstone Advisors Real, you can compare the effects of market volatilities on Citigroup and Cornerstone Advisors 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 Cornerstone Advisors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Cornerstone Advisors.
Diversification Opportunities for Citigroup and Cornerstone Advisors
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Citigroup and Cornerstone is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Cornerstone Advisors Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cornerstone Advisors Real 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 Cornerstone Advisors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cornerstone Advisors Real has no effect on the direction of Citigroup i.e., Citigroup and Cornerstone Advisors go up and down completely randomly.
Pair Corralation between Citigroup and Cornerstone Advisors
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.77 times more return on investment than Cornerstone Advisors. However, Citigroup is 1.77 times more volatile than Cornerstone Advisors Real. It trades about 0.09 of its potential returns per unit of risk. Cornerstone Advisors Real is currently generating about 0.05 per unit of risk. If you would invest 4,135 in Citigroup on December 1, 2024 and sell it today you would earn a total of 3,860 from holding Citigroup or generate 93.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Cornerstone Advisors Real
Performance |
| Timeline |
| Citigroup |
| Cornerstone Advisors Real |
Citigroup and Cornerstone Advisors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Cornerstone Advisors
The main advantage of trading using opposite Citigroup and Cornerstone Advisors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Cornerstone Advisors 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 Cornerstone Advisors will offset losses from the drop in Cornerstone Advisors' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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