Correlation Between Citigroup and Dfa Real
Can any of the company-specific risk be diversified away by investing in both Citigroup and Dfa Real 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 Dfa Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Dfa Real Estate, you can compare the effects of market volatilities on Citigroup and Dfa Real 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 Dfa Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Dfa Real.
Diversification Opportunities for Citigroup and Dfa Real
Very good diversification
The 3 months correlation between Citigroup and DFA is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Dfa Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dfa Real Estate 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 Dfa Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dfa Real Estate has no effect on the direction of Citigroup i.e., Citigroup and Dfa Real go up and down completely randomly.
Pair Corralation between Citigroup and Dfa Real
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.66 times more return on investment than Dfa Real. However, Citigroup is 1.66 times more volatile than Dfa Real Estate. It trades about 0.11 of its potential returns per unit of risk. Dfa Real Estate is currently generating about 0.07 per unit of risk. If you would invest 4,567 in Citigroup on August 29, 2024 and sell it today you would earn a total of 2,408 from holding Citigroup or generate 52.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Dfa Real Estate
Performance |
| Timeline |
| Citigroup |
| Dfa Real Estate |
Citigroup and Dfa Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Dfa Real
The main advantage of trading using opposite Citigroup and Dfa Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Dfa Real 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 Dfa Real will offset losses from the drop in Dfa Real's long position.The idea behind Citigroup and Dfa Real Estate pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Dfa Real vs. Dfa International Small | Dfa Real vs. Us Large Cap | Dfa Real vs. International Small Pany | Dfa Real vs. Dfa International Value |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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