Correlation Between Citigroup and Mfs Prudent
Can any of the company-specific risk be diversified away by investing in both Citigroup and Mfs Prudent 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 Mfs Prudent into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Mfs Prudent Investor, you can compare the effects of market volatilities on Citigroup and Mfs Prudent 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 Mfs Prudent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Mfs Prudent.
Diversification Opportunities for Citigroup and Mfs Prudent
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Mfs is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Mfs Prudent Investor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Prudent Investor 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 Mfs Prudent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Prudent Investor has no effect on the direction of Citigroup i.e., Citigroup and Mfs Prudent go up and down completely randomly.
Pair Corralation between Citigroup and Mfs Prudent
Taking into account the 90-day investment horizon Citigroup is expected to generate 4.22 times more return on investment than Mfs Prudent. However, Citigroup is 4.22 times more volatile than Mfs Prudent Investor. It trades about 0.1 of its potential returns per unit of risk. Mfs Prudent Investor is currently generating about 0.04 per unit of risk. If you would invest 4,959 in Citigroup on August 25, 2024 and sell it today you would earn a total of 2,025 from holding Citigroup or generate 40.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Mfs Prudent Investor
Performance |
| Timeline |
| Citigroup |
| Mfs Prudent Investor |
Citigroup and Mfs Prudent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Mfs Prudent
The main advantage of trading using opposite Citigroup and Mfs Prudent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Mfs Prudent 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 Mfs Prudent will offset losses from the drop in Mfs Prudent's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| Mfs Prudent vs. Ashmore Emerging Markets | Mfs Prudent vs. Pioneer Money Market | Mfs Prudent vs. American Century California | Mfs Prudent vs. Transamerica Funds |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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