Correlation Between Citigroup and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Citigroup and Eaton Vance 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 Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Eaton Vance Atlanta, you can compare the effects of market volatilities on Citigroup and Eaton Vance 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 Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Eaton Vance.
Diversification Opportunities for Citigroup and Eaton Vance
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Eaton is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Eaton Vance Atlanta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Atlanta 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 Eaton Vance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaton Vance Atlanta has no effect on the direction of Citigroup i.e., Citigroup and Eaton Vance go up and down completely randomly.
Pair Corralation between Citigroup and Eaton Vance
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.1 times more return on investment than Eaton Vance. However, Citigroup is 2.1 times more volatile than Eaton Vance Atlanta. It trades about 0.08 of its potential returns per unit of risk. Eaton Vance Atlanta is currently generating about 0.11 per unit of risk. If you would invest 5,415 in Citigroup on August 28, 2024 and sell it today you would earn a total of 1,660 from holding Citigroup or generate 30.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.52% |
| Values | Daily Returns |
Citigroup vs. Eaton Vance Atlanta
Performance |
| Timeline |
| Citigroup |
| Eaton Vance Atlanta |
Citigroup and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Eaton Vance
The main advantage of trading using opposite Citigroup and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Eaton Vance 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 Eaton Vance will offset losses from the drop in Eaton Vance's long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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