Correlation Between Citigroup and Dreyfus International
Can any of the company-specific risk be diversified away by investing in both Citigroup and Dreyfus International 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 International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Dreyfus International Equity, you can compare the effects of market volatilities on Citigroup and Dreyfus International 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 International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Dreyfus International.
Diversification Opportunities for Citigroup and Dreyfus International
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Dreyfus is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Dreyfus International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus International 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 International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus International has no effect on the direction of Citigroup i.e., Citigroup and Dreyfus International go up and down completely randomly.
Pair Corralation between Citigroup and Dreyfus International
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.04 times more return on investment than Dreyfus International. However, Citigroup is 2.04 times more volatile than Dreyfus International Equity. It trades about 0.07 of its potential returns per unit of risk. Dreyfus International Equity is currently generating about 0.05 per unit of risk. If you would invest 4,206 in Citigroup on August 25, 2024 and sell it today you would earn a total of 2,778 from holding Citigroup or generate 66.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Citigroup vs. Dreyfus International Equity
Performance |
| Timeline |
| Citigroup |
| Dreyfus International |
Citigroup and Dreyfus International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Dreyfus International
The main advantage of trading using opposite Citigroup and Dreyfus International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Dreyfus International 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 International will offset losses from the drop in Dreyfus International's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Canadian Imperial Bank |
| Dreyfus International vs. Artisan Developing World | Dreyfus International vs. Artisan High Income | Dreyfus International vs. HUMANA INC | Dreyfus International vs. Aquagold International |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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