Correlation Between Citigroup and Brinker Capital
Can any of the company-specific risk be diversified away by investing in both Citigroup and Brinker Capital 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 Brinker Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Brinker Capital Destinations, you can compare the effects of market volatilities on Citigroup and Brinker Capital 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 Brinker Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Brinker Capital.
Diversification Opportunities for Citigroup and Brinker Capital
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Brinker is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Brinker Capital Destinations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brinker Capital Dest 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 Brinker Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brinker Capital Dest has no effect on the direction of Citigroup i.e., Citigroup and Brinker Capital go up and down completely randomly.
Pair Corralation between Citigroup and Brinker Capital
Taking into account the 90-day investment horizon Citigroup is expected to generate 3.21 times more return on investment than Brinker Capital. However, Citigroup is 3.21 times more volatile than Brinker Capital Destinations. It trades about 0.08 of its potential returns per unit of risk. Brinker Capital Destinations is currently generating about 0.13 per unit of risk. If you would invest 6,064 in Citigroup on September 3, 2024 and sell it today you would earn a total of 1,075 from holding Citigroup or generate 17.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Brinker Capital Destinations
Performance |
| Timeline |
| Citigroup |
| Brinker Capital Dest |
Citigroup and Brinker Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Brinker Capital
The main advantage of trading using opposite Citigroup and Brinker Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Brinker Capital 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 Brinker Capital will offset losses from the drop in Brinker Capital's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Brinker Capital vs. Blackrock Science Technology | Brinker Capital vs. Red Oak Technology | Brinker Capital vs. Dreyfus Technology Growth | Brinker Capital vs. Mfs Technology Fund |
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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