Correlation Between Citigroup and Unity Wealth
Can any of the company-specific risk be diversified away by investing in both Citigroup and Unity Wealth 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 Unity Wealth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Unity Wealth Partners, you can compare the effects of market volatilities on Citigroup and Unity Wealth 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 Unity Wealth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Unity Wealth.
Diversification Opportunities for Citigroup and Unity Wealth
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Citigroup and Unity is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Unity Wealth Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unity Wealth Partners 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 Unity Wealth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unity Wealth Partners has no effect on the direction of Citigroup i.e., Citigroup and Unity Wealth go up and down completely randomly.
Pair Corralation between Citigroup and Unity Wealth
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.01 times more return on investment than Unity Wealth. However, Citigroup is 2.01 times more volatile than Unity Wealth Partners. It trades about 0.07 of its potential returns per unit of risk. Unity Wealth Partners is currently generating about 0.11 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 Together |
| Strength | Very Strong |
| Accuracy | 18.38% |
| Values | Daily Returns |
Citigroup vs. Unity Wealth Partners
Performance |
| Timeline |
| Citigroup |
| Unity Wealth Partners |
Citigroup and Unity Wealth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Unity Wealth
The main advantage of trading using opposite Citigroup and Unity Wealth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Unity Wealth 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 Unity Wealth will offset losses from the drop in Unity Wealth's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Unity Wealth vs. Global X SP | Unity Wealth vs. Amplify CWP Enhanced | Unity Wealth vs. Global X Russell | Unity Wealth 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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