Correlation Between Citigroup and SGI Dynamic
Can any of the company-specific risk be diversified away by investing in both Citigroup and SGI Dynamic 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 SGI Dynamic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and SGI Dynamic Tactical, you can compare the effects of market volatilities on Citigroup and SGI Dynamic 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 SGI Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and SGI Dynamic.
Diversification Opportunities for Citigroup and SGI Dynamic
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and SGI is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and SGI Dynamic Tactical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SGI Dynamic Tactical 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 SGI Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SGI Dynamic Tactical has no effect on the direction of Citigroup i.e., Citigroup and SGI Dynamic go up and down completely randomly.
Pair Corralation between Citigroup and SGI Dynamic
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.67 times more return on investment than SGI Dynamic. However, Citigroup is 2.67 times more volatile than SGI Dynamic Tactical. It trades about 0.33 of its potential returns per unit of risk. SGI Dynamic Tactical is currently generating about 0.33 per unit of risk. If you would invest 6,235 in Citigroup on September 4, 2024 and sell it today you would earn a total of 904.00 from holding Citigroup or generate 14.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. SGI Dynamic Tactical
Performance |
| Timeline |
| Citigroup |
| SGI Dynamic Tactical |
Citigroup and SGI Dynamic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and SGI Dynamic
The main advantage of trading using opposite Citigroup and SGI Dynamic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, SGI Dynamic 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 SGI Dynamic will offset losses from the drop in SGI Dynamic's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| SGI Dynamic vs. iShares Core Aggressive | SGI Dynamic vs. Tidal Trust II | SGI Dynamic vs. SPDR SSgA Multi Asset | SGI Dynamic vs. SPDR SSgA Global |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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