Correlation Between Citigroup and Direxion Monthly
Can any of the company-specific risk be diversified away by investing in both Citigroup and Direxion Monthly 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 Direxion Monthly into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Direxion Monthly Sp, you can compare the effects of market volatilities on Citigroup and Direxion Monthly 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 Direxion Monthly. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Direxion Monthly.
Diversification Opportunities for Citigroup and Direxion Monthly
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Citigroup and Direxion is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Direxion Monthly Sp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Direxion Monthly 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 Direxion Monthly. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Direxion Monthly has no effect on the direction of Citigroup i.e., Citigroup and Direxion Monthly go up and down completely randomly.
Pair Corralation between Citigroup and Direxion Monthly
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.47 times more return on investment than Direxion Monthly. However, Citigroup is 1.47 times more volatile than Direxion Monthly Sp. It trades about 0.0 of its potential returns per unit of risk. Direxion Monthly Sp is currently generating about -0.14 per unit of risk. If you would invest 7,939 in Citigroup on November 29, 2024 and sell it today you would lose (32.00) from holding Citigroup or give up 0.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Direxion Monthly Sp
Performance |
| Timeline |
| Citigroup |
| Direxion Monthly |
Citigroup and Direxion Monthly Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Direxion Monthly
The main advantage of trading using opposite Citigroup and Direxion Monthly positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Direxion Monthly 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 Direxion Monthly will offset losses from the drop in Direxion Monthly's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Direxion Monthly vs. Ashmore Emerging Markets | Direxion Monthly vs. Blackrock Smid Cap Growth | Direxion Monthly vs. Fidelity Small Cap | Direxion Monthly vs. Ab Small Cap |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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