Correlation Between Citigroup and Arrow Dwa
Can any of the company-specific risk be diversified away by investing in both Citigroup and Arrow Dwa 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 Arrow Dwa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Arrow Dwa Balanced, you can compare the effects of market volatilities on Citigroup and Arrow Dwa 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 Arrow Dwa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Arrow Dwa.
Diversification Opportunities for Citigroup and Arrow Dwa
Significant diversification
The 3 months correlation between Citigroup and Arrow is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Arrow Dwa Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Dwa Balanced 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 Arrow Dwa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Dwa Balanced has no effect on the direction of Citigroup i.e., Citigroup and Arrow Dwa go up and down completely randomly.
Pair Corralation between Citigroup and Arrow Dwa
Taking into account the 90-day investment horizon Citigroup is expected to generate 4.06 times more return on investment than Arrow Dwa. However, Citigroup is 4.06 times more volatile than Arrow Dwa Balanced. It trades about 0.21 of its potential returns per unit of risk. Arrow Dwa Balanced is currently generating about 0.07 per unit of risk. If you would invest 6,255 in Citigroup on August 24, 2024 and sell it today you would earn a total of 640.00 from holding Citigroup or generate 10.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Arrow Dwa Balanced
Performance |
| Timeline |
| Citigroup |
| Arrow Dwa Balanced |
Citigroup and Arrow Dwa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Arrow Dwa
The main advantage of trading using opposite Citigroup and Arrow Dwa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Arrow Dwa 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 Arrow Dwa will offset losses from the drop in Arrow Dwa's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Arrow Dwa vs. Applied Finance Explorer | Arrow Dwa vs. Pace Smallmedium Value | Arrow Dwa vs. Vanguard Small Cap Value | Arrow Dwa vs. Lord Abbett Small |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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