Correlation Between Citigroup and Columbia Dividend
Can any of the company-specific risk be diversified away by investing in both Citigroup and Columbia Dividend 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 Columbia Dividend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Columbia Dividend Income, you can compare the effects of market volatilities on Citigroup and Columbia Dividend 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 Columbia Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Columbia Dividend.
Diversification Opportunities for Citigroup and Columbia Dividend
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Columbia is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Columbia Dividend Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Dividend Income 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 Columbia Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Dividend Income has no effect on the direction of Citigroup i.e., Citigroup and Columbia Dividend go up and down completely randomly.
Pair Corralation between Citigroup and Columbia Dividend
Taking into account the 90-day investment horizon Citigroup is expected to generate 3.26 times more return on investment than Columbia Dividend. However, Citigroup is 3.26 times more volatile than Columbia Dividend Income. It trades about 0.26 of its potential returns per unit of risk. Columbia Dividend Income is currently generating about 0.34 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 | 95.45% |
| Values | Daily Returns |
Citigroup vs. Columbia Dividend Income
Performance |
| Timeline |
| Citigroup |
| Columbia Dividend Income |
Citigroup and Columbia Dividend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Columbia Dividend
The main advantage of trading using opposite Citigroup and Columbia Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Columbia Dividend 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 Columbia Dividend will offset losses from the drop in Columbia Dividend's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Columbia Dividend vs. Aqr Large Cap | Columbia Dividend vs. American Mutual Fund | Columbia Dividend vs. Dodge Cox Stock | Columbia Dividend vs. Touchstone Large Cap |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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