Correlation Between Citigroup and Dreyfus Natural
Can any of the company-specific risk be diversified away by investing in both Citigroup and Dreyfus Natural 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 Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Dreyfus Natural Resources, you can compare the effects of market volatilities on Citigroup and Dreyfus Natural 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 Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Dreyfus Natural.
Diversification Opportunities for Citigroup and Dreyfus Natural
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Dreyfus is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Dreyfus Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Natural Resources 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 Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Natural Resources has no effect on the direction of Citigroup i.e., Citigroup and Dreyfus Natural go up and down completely randomly.
Pair Corralation between Citigroup and Dreyfus Natural
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.15 times more return on investment than Dreyfus Natural. However, Citigroup is 2.15 times more volatile than Dreyfus Natural Resources. It trades about 0.45 of its potential returns per unit of risk. Dreyfus Natural Resources is currently generating about 0.16 per unit of risk. If you would invest 6,994 in Citigroup on November 2, 2024 and sell it today you would earn a total of 1,192 from holding Citigroup or generate 17.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Citigroup vs. Dreyfus Natural Resources
Performance |
| Timeline |
| Citigroup |
| Dreyfus Natural Resources |
Citigroup and Dreyfus Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Dreyfus Natural
The main advantage of trading using opposite Citigroup and Dreyfus Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Dreyfus Natural 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 Natural will offset losses from the drop in Dreyfus Natural's long position.| Citigroup vs. Royal Bank of | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Canadian Imperial Bank |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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