Correlation Between Citigroup and Stadion Tactical
Can any of the company-specific risk be diversified away by investing in both Citigroup and Stadion Tactical 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 Stadion Tactical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Stadion Tactical Defensive, you can compare the effects of market volatilities on Citigroup and Stadion Tactical 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 Stadion Tactical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Stadion Tactical.
Diversification Opportunities for Citigroup and Stadion Tactical
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Stadion is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Stadion Tactical Defensive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stadion Tactical Def 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 Stadion Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stadion Tactical Def has no effect on the direction of Citigroup i.e., Citigroup and Stadion Tactical go up and down completely randomly.
Pair Corralation between Citigroup and Stadion Tactical
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.83 times more return on investment than Stadion Tactical. However, Citigroup is 2.83 times more volatile than Stadion Tactical Defensive. It trades about 0.23 of its potential returns per unit of risk. Stadion Tactical Defensive is currently generating about 0.12 per unit of risk. If you would invest 6,360 in Citigroup on August 27, 2024 and sell it today you would earn a total of 624.00 from holding Citigroup or generate 9.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Stadion Tactical Defensive
Performance |
| Timeline |
| Citigroup |
| Stadion Tactical Def |
Citigroup and Stadion Tactical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Stadion Tactical
The main advantage of trading using opposite Citigroup and Stadion Tactical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Stadion Tactical 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 Stadion Tactical will offset losses from the drop in Stadion Tactical's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| Stadion Tactical vs. Goldman Sachs High | Stadion Tactical vs. Western Asset High | Stadion Tactical vs. Ab Global Risk | Stadion Tactical vs. Franklin High Income |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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