Correlation Between Citigroup and Causeway International
Can any of the company-specific risk be diversified away by investing in both Citigroup and Causeway International 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 Causeway International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Causeway International Opportunities, you can compare the effects of market volatilities on Citigroup and Causeway International 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 Causeway International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Causeway International.
Diversification Opportunities for Citigroup and Causeway International
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Causeway is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Causeway International Opportu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Causeway International 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 Causeway International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Causeway International has no effect on the direction of Citigroup i.e., Citigroup and Causeway International go up and down completely randomly.
Pair Corralation between Citigroup and Causeway International
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.08 times more return on investment than Causeway International. However, Citigroup is 2.08 times more volatile than Causeway International Opportunities. It trades about 0.07 of its potential returns per unit of risk. Causeway International Opportunities is currently generating about 0.08 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 Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Causeway International Opportu
Performance |
| Timeline |
| Citigroup |
| Causeway International |
Citigroup and Causeway International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Causeway International
The main advantage of trading using opposite Citigroup and Causeway International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Causeway International 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 Causeway International will offset losses from the drop in Causeway International's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Causeway International vs. The Gold Bullion | Causeway International vs. First Eagle Gold | Causeway International vs. Invesco Gold Special | Causeway International vs. Gold And Precious |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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