Correlation Between Citigroup and Total Return
Can any of the company-specific risk be diversified away by investing in both Citigroup and Total Return 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 Total Return into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Total Return Bond, you can compare the effects of market volatilities on Citigroup and Total Return 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 Total Return. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Total Return.
Diversification Opportunities for Citigroup and Total Return
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citigroup and Total is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Total Return Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Total Return Bond 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 Total Return. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Total Return Bond has no effect on the direction of Citigroup i.e., Citigroup and Total Return go up and down completely randomly.
Pair Corralation between Citigroup and Total Return
Taking into account the 90-day investment horizon Citigroup is expected to generate 22.79 times more return on investment than Total Return. However, Citigroup is 22.79 times more volatile than Total Return Bond. It trades about 0.24 of its potential returns per unit of risk. Total Return Bond is currently generating about 0.1 per unit of risk. If you would invest 6,245 in Citigroup on August 25, 2024 and sell it today you would earn a total of 739.00 from holding Citigroup or generate 11.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Total Return Bond
Performance |
| Timeline |
| Citigroup |
| Total Return Bond |
Citigroup and Total Return Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Total Return
The main advantage of trading using opposite Citigroup and Total Return positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Total Return 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 Total Return will offset losses from the drop in Total Return's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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