Correlation Between Citigroup and Invesco Charter
Can any of the company-specific risk be diversified away by investing in both Citigroup and Invesco Charter 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 Invesco Charter into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Invesco Charter Fund, you can compare the effects of market volatilities on Citigroup and Invesco Charter 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 Invesco Charter. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Invesco Charter.
Diversification Opportunities for Citigroup and Invesco Charter
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Citigroup and Invesco is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Invesco Charter Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Charter 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 Invesco Charter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Charter has no effect on the direction of Citigroup i.e., Citigroup and Invesco Charter go up and down completely randomly.
Pair Corralation between Citigroup and Invesco Charter
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.92 times more return on investment than Invesco Charter. However, Citigroup is 1.92 times more volatile than Invesco Charter Fund. It trades about 0.08 of its potential returns per unit of risk. Invesco Charter Fund is currently generating about 0.1 per unit of risk. If you would invest 4,091 in Citigroup on September 14, 2024 and sell it today you would earn a total of 3,029 from holding Citigroup or generate 74.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Citigroup vs. Invesco Charter Fund
Performance |
| Timeline |
| Citigroup |
| Invesco Charter |
Citigroup and Invesco Charter Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Invesco Charter
The main advantage of trading using opposite Citigroup and Invesco Charter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Invesco Charter 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 Invesco Charter will offset losses from the drop in Invesco Charter's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Invesco Charter vs. Invesco Municipal Income | Invesco Charter vs. Invesco Municipal Income | Invesco Charter vs. Invesco Municipal Income | Invesco Charter vs. Oppenheimer Rising Dividends |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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