Correlation Between Citigroup and Gold Portfolio
Can any of the company-specific risk be diversified away by investing in both Citigroup and Gold Portfolio 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 Gold Portfolio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Gold Portfolio Gold, you can compare the effects of market volatilities on Citigroup and Gold Portfolio 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 Gold Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Gold Portfolio.
Diversification Opportunities for Citigroup and Gold Portfolio
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Citigroup and Gold is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Gold Portfolio Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Portfolio Gold 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 Gold Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Portfolio Gold has no effect on the direction of Citigroup i.e., Citigroup and Gold Portfolio go up and down completely randomly.
Pair Corralation between Citigroup and Gold Portfolio
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.09 times more return on investment than Gold Portfolio. However, Citigroup is 1.09 times more volatile than Gold Portfolio Gold. It trades about 0.06 of its potential returns per unit of risk. Gold Portfolio Gold is currently generating about 0.04 per unit of risk. If you would invest 6,131 in Citigroup on August 25, 2024 and sell it today you would earn a total of 853.00 from holding Citigroup or generate 13.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Gold Portfolio Gold
Performance |
| Timeline |
| Citigroup |
| Gold Portfolio Gold |
Citigroup and Gold Portfolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Gold Portfolio
The main advantage of trading using opposite Citigroup and Gold Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Gold Portfolio 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 Gold Portfolio will offset losses from the drop in Gold Portfolio's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Gold Portfolio vs. First Eagle Gold | Gold Portfolio vs. First Eagle Gold | Gold Portfolio vs. First Eagle Gold | Gold Portfolio vs. Gold Portfolio Fidelity |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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