Correlation Between Citigroup and CD Private
Can any of the company-specific risk be diversified away by investing in both Citigroup and CD Private 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 CD Private into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and CD Private Equity, you can compare the effects of market volatilities on Citigroup and CD Private 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 CD Private. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and CD Private.
Diversification Opportunities for Citigroup and CD Private
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Citigroup and CD3 is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and CD Private Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CD Private Equity 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 CD Private. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CD Private Equity has no effect on the direction of Citigroup i.e., Citigroup and CD Private go up and down completely randomly.
Pair Corralation between Citigroup and CD Private
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.09 times more return on investment than CD Private. However, Citigroup is 1.09 times more volatile than CD Private Equity. It trades about 0.07 of its potential returns per unit of risk. CD Private Equity is currently generating about -0.02 per unit of risk. If you would invest 6,117 in Citigroup on August 29, 2024 and sell it today you would earn a total of 899.00 from holding Citigroup or generate 14.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Citigroup vs. CD Private Equity
Performance |
| Timeline |
| Citigroup |
| CD Private Equity |
Citigroup and CD Private Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and CD Private
The main advantage of trading using opposite Citigroup and CD Private positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, CD Private 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 CD Private will offset losses from the drop in CD Private's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| CD Private vs. iShares MSCI Emerging | CD Private vs. Global X Hydrogen | CD Private vs. Janus Henderson Sustainable | CD Private vs. JPMorgan Equity Premium |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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