Correlation Between Citigroup and Mainstay Epoch
Can any of the company-specific risk be diversified away by investing in both Citigroup and Mainstay Epoch 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 Mainstay Epoch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Mainstay Epoch Equity, you can compare the effects of market volatilities on Citigroup and Mainstay Epoch 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 Mainstay Epoch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Mainstay Epoch.
Diversification Opportunities for Citigroup and Mainstay Epoch
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Mainstay is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Mainstay Epoch Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Epoch Equity 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 Mainstay Epoch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Epoch Equity has no effect on the direction of Citigroup i.e., Citigroup and Mainstay Epoch go up and down completely randomly.
Pair Corralation between Citigroup and Mainstay Epoch
Taking into account the 90-day investment horizon Citigroup is expected to generate 3.16 times more return on investment than Mainstay Epoch. However, Citigroup is 3.16 times more volatile than Mainstay Epoch Equity. It trades about 0.26 of its potential returns per unit of risk. Mainstay Epoch Equity is currently generating about 0.32 per unit of risk. If you would invest 6,361 in Citigroup on September 1, 2024 and sell it today you would earn a total of 726.00 from holding Citigroup or generate 11.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Citigroup vs. Mainstay Epoch Equity
Performance |
| Timeline |
| Citigroup |
| Mainstay Epoch Equity |
Citigroup and Mainstay Epoch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Mainstay Epoch
The main advantage of trading using opposite Citigroup and Mainstay Epoch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Mainstay Epoch 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 Mainstay Epoch will offset losses from the drop in Mainstay Epoch's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Mainstay Epoch vs. Mainstay High Yield | Mainstay Epoch vs. Mainstay Tax Free | Mainstay Epoch vs. Mainstay Income Builder | Mainstay Epoch vs. Mainstay Large 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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