Correlation Between Citigroup and Strategic Advisers
Can any of the company-specific risk be diversified away by investing in both Citigroup and Strategic Advisers 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 Strategic Advisers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Strategic Advisers Small Mid, you can compare the effects of market volatilities on Citigroup and Strategic Advisers 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 Strategic Advisers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Strategic Advisers.
Diversification Opportunities for Citigroup and Strategic Advisers
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citigroup and Strategic is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Strategic Advisers Small Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Advisers 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 Strategic Advisers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Advisers has no effect on the direction of Citigroup i.e., Citigroup and Strategic Advisers go up and down completely randomly.
Pair Corralation between Citigroup and Strategic Advisers
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.99 times more return on investment than Strategic Advisers. However, Citigroup is 1.99 times more volatile than Strategic Advisers Small Mid. It trades about 0.22 of its potential returns per unit of risk. Strategic Advisers Small Mid is currently generating about 0.14 per unit of risk. If you would invest 6,360 in Citigroup on August 29, 2024 and sell it today you would earn a total of 656.00 from holding Citigroup or generate 10.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Strategic Advisers Small Mid
Performance |
| Timeline |
| Citigroup |
| Strategic Advisers |
Citigroup and Strategic Advisers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Strategic Advisers
The main advantage of trading using opposite Citigroup and Strategic Advisers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Strategic Advisers 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 Strategic Advisers will offset losses from the drop in Strategic Advisers' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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