Correlation Between Citigroup and Flaherty Crumrine
Can any of the company-specific risk be diversified away by investing in both Citigroup and Flaherty Crumrine 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 Flaherty Crumrine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Flaherty Crumrine Total, you can compare the effects of market volatilities on Citigroup and Flaherty Crumrine 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 Flaherty Crumrine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Flaherty Crumrine.
Diversification Opportunities for Citigroup and Flaherty Crumrine
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Citigroup and Flaherty is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Flaherty Crumrine Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flaherty Crumrine Total 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 Flaherty Crumrine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flaherty Crumrine Total has no effect on the direction of Citigroup i.e., Citigroup and Flaherty Crumrine go up and down completely randomly.
Pair Corralation between Citigroup and Flaherty Crumrine
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.79 times more return on investment than Flaherty Crumrine. However, Citigroup is 1.79 times more volatile than Flaherty Crumrine Total. It trades about 0.07 of its potential returns per unit of risk. Flaherty Crumrine Total is currently generating about 0.04 per unit of risk. If you would invest 4,117 in Citigroup on August 28, 2024 and sell it today you would earn a total of 2,958 from holding Citigroup or generate 71.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Flaherty Crumrine Total
Performance |
| Timeline |
| Citigroup |
| Flaherty Crumrine Total |
Citigroup and Flaherty Crumrine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Flaherty Crumrine
The main advantage of trading using opposite Citigroup and Flaherty Crumrine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Flaherty Crumrine 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 Flaherty Crumrine will offset losses from the drop in Flaherty Crumrine's long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
| Flaherty Crumrine vs. Flaherty Crumrine Preferredome | Flaherty Crumrine vs. John Hancock Preferred | Flaherty Crumrine vs. Eagle Capital Growth | Flaherty Crumrine vs. John Hancock Preferred |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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