Correlation Between Citigroup and Dfa Short-term
Can any of the company-specific risk be diversified away by investing in both Citigroup and Dfa Short-term 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 Short-term into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Dfa Short Term Municipal, you can compare the effects of market volatilities on Citigroup and Dfa Short-term 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 Short-term. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Dfa Short-term.
Diversification Opportunities for Citigroup and Dfa Short-term
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Dfa is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Dfa Short Term Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dfa Short Term 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 Short-term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dfa Short Term has no effect on the direction of Citigroup i.e., Citigroup and Dfa Short-term go up and down completely randomly.
Pair Corralation between Citigroup and Dfa Short-term
Taking into account the 90-day investment horizon Citigroup is expected to generate 32.11 times more return on investment than Dfa Short-term. However, Citigroup is 32.11 times more volatile than Dfa Short Term Municipal. It trades about 0.21 of its potential returns per unit of risk. Dfa Short Term Municipal is currently generating about 0.07 per unit of risk. If you would invest 6,393 in Citigroup on August 31, 2024 and sell it today you would earn a total of 623.00 from holding Citigroup or generate 9.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Dfa Short Term Municipal
Performance |
| Timeline |
| Citigroup |
| Dfa Short Term |
Citigroup and Dfa Short-term Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Dfa Short-term
The main advantage of trading using opposite Citigroup and Dfa Short-term positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Dfa Short-term 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 Short-term will offset losses from the drop in Dfa Short-term's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Dfa Short-term vs. T Rowe Price | Dfa Short-term vs. Old Westbury Large | Dfa Short-term vs. Principal Lifetime Hybrid | Dfa Short-term vs. T Rowe Price |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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