Correlation Between Citigroup and Dreyfus Floating
Can any of the company-specific risk be diversified away by investing in both Citigroup and Dreyfus Floating 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 Dreyfus Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Dreyfus Floating Rate, you can compare the effects of market volatilities on Citigroup and Dreyfus Floating 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 Dreyfus Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Dreyfus Floating.
Diversification Opportunities for Citigroup and Dreyfus Floating
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Dreyfus is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Dreyfus Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Floating Rate 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 Dreyfus Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Floating Rate has no effect on the direction of Citigroup i.e., Citigroup and Dreyfus Floating go up and down completely randomly.
Pair Corralation between Citigroup and Dreyfus Floating
Taking into account the 90-day investment horizon Citigroup is expected to generate 11.62 times more return on investment than Dreyfus Floating. However, Citigroup is 11.62 times more volatile than Dreyfus Floating Rate. It trades about 0.33 of its potential returns per unit of risk. Dreyfus Floating Rate is currently generating about 0.1 per unit of risk. If you would invest 6,235 in Citigroup on September 3, 2024 and sell it today you would earn a total of 904.00 from holding Citigroup or generate 14.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Dreyfus Floating Rate
Performance |
| Timeline |
| Citigroup |
| Dreyfus Floating Rate |
Citigroup and Dreyfus Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Dreyfus Floating
The main advantage of trading using opposite Citigroup and Dreyfus Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Dreyfus Floating 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 Dreyfus Floating will offset losses from the drop in Dreyfus Floating'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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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