Correlation Between Citigroup and Columbia Global
Can any of the company-specific risk be diversified away by investing in both Citigroup and Columbia Global 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 Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Columbia Global Opportunities, you can compare the effects of market volatilities on Citigroup and Columbia Global 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 Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Columbia Global.
Diversification Opportunities for Citigroup and Columbia Global
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Citigroup and Columbia is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Columbia Global Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Global Oppo 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 Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Global Oppo has no effect on the direction of Citigroup i.e., Citigroup and Columbia Global go up and down completely randomly.
Pair Corralation between Citigroup and Columbia Global
Taking into account the 90-day investment horizon Citigroup is expected to generate 3.33 times more return on investment than Columbia Global. However, Citigroup is 3.33 times more volatile than Columbia Global Opportunities. It trades about 0.08 of its potential returns per unit of risk. Columbia Global Opportunities is currently generating about 0.07 per unit of risk. If you would invest 6,065 in Citigroup on September 5, 2024 and sell it today you would earn a total of 1,077 from holding Citigroup or generate 17.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.0% |
| Values | Daily Returns |
Citigroup vs. Columbia Global Opportunities
Performance |
| Timeline |
| Citigroup |
| Columbia Global Oppo |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Citigroup and Columbia Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Columbia Global
The main advantage of trading using opposite Citigroup and Columbia Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Columbia Global 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 Global will offset losses from the drop in Columbia Global's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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