Correlation Between Citigroup and Community West
Can any of the company-specific risk be diversified away by investing in both Citigroup and Community West 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 Community West into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Community West Bancshares, you can compare the effects of market volatilities on Citigroup and Community West 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 Community West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Community West.
Diversification Opportunities for Citigroup and Community West
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citigroup and Community is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Community West Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Community West Bancshares 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 Community West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Community West Bancshares has no effect on the direction of Citigroup i.e., Citigroup and Community West go up and down completely randomly.
Pair Corralation between Citigroup and Community West
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.34 times less return on investment than Community West. In addition to that, Citigroup is 1.1 times more volatile than Community West Bancshares. It trades about 0.32 of its total potential returns per unit of risk. Community West Bancshares is currently generating about 0.47 per unit of volatility. If you would invest 1,842 in Community West Bancshares on September 3, 2024 and sell it today you would earn a total of 350.00 from holding Community West Bancshares or generate 19.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Community West Bancshares
Performance |
| Timeline |
| Citigroup |
| Community West Bancshares |
Citigroup and Community West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Community West
The main advantage of trading using opposite Citigroup and Community West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Community West 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 Community West will offset losses from the drop in Community West's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Community West vs. JPMorgan Chase Co | Community West vs. Citigroup | Community West vs. Wells Fargo | Community West vs. Toronto Dominion Bank |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |