Correlation Between Citigroup and Pacer Cash
Can any of the company-specific risk be diversified away by investing in both Citigroup and Pacer Cash 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 Pacer Cash into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Pacer Cash Cows, you can compare the effects of market volatilities on Citigroup and Pacer Cash 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 Pacer Cash. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Pacer Cash.
Diversification Opportunities for Citigroup and Pacer Cash
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Pacer is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Pacer Cash Cows in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Cash Cows 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 Pacer Cash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Cash Cows has no effect on the direction of Citigroup i.e., Citigroup and Pacer Cash go up and down completely randomly.
Pair Corralation between Citigroup and Pacer Cash
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.71 times more return on investment than Pacer Cash. However, Citigroup is 1.71 times more volatile than Pacer Cash Cows. It trades about 0.07 of its potential returns per unit of risk. Pacer Cash Cows is currently generating about 0.06 per unit of risk. If you would invest 4,206 in Citigroup on August 24, 2024 and sell it today you would earn a total of 2,778 from holding Citigroup or generate 66.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Pacer Cash Cows
Performance |
| Timeline |
| Citigroup |
| Pacer Cash Cows |
Citigroup and Pacer Cash Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Pacer Cash
The main advantage of trading using opposite Citigroup and Pacer Cash positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Pacer Cash 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 Pacer Cash will offset losses from the drop in Pacer Cash's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Pacer Cash vs. Pacer Small Cap | Pacer Cash vs. Pacer Global Cash | Pacer Cash vs. Amplify CWP Enhanced | Pacer Cash vs. JPMorgan Nasdaq Equity |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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