Correlation Between Citigroup and Fuller Thaler
Can any of the company-specific risk be diversified away by investing in both Citigroup and Fuller Thaler 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 Fuller Thaler into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Fuller Thaler Behavioral, you can compare the effects of market volatilities on Citigroup and Fuller Thaler 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 Fuller Thaler. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Fuller Thaler.
Diversification Opportunities for Citigroup and Fuller Thaler
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Citigroup and Fuller is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Fuller Thaler Behavioral in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuller Thaler Behavioral 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 Fuller Thaler. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuller Thaler Behavioral has no effect on the direction of Citigroup i.e., Citigroup and Fuller Thaler go up and down completely randomly.
Pair Corralation between Citigroup and Fuller Thaler
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.66 times more return on investment than Fuller Thaler. However, Citigroup is 1.66 times more volatile than Fuller Thaler Behavioral. It trades about 0.07 of its potential returns per unit of risk. Fuller Thaler Behavioral is currently generating about 0.1 per unit of risk. If you would invest 4,293 in Citigroup on September 3, 2024 and sell it today you would earn a total of 2,794 from holding Citigroup or generate 65.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Fuller Thaler Behavioral
Performance |
| Timeline |
| Citigroup |
| Fuller Thaler Behavioral |
Citigroup and Fuller Thaler Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Fuller Thaler
The main advantage of trading using opposite Citigroup and Fuller Thaler positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Fuller Thaler 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 Fuller Thaler will offset losses from the drop in Fuller Thaler's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Fuller Thaler vs. Maryland Short Term Tax Free | Fuller Thaler vs. Federated Short Term Income | Fuller Thaler vs. Old Westbury Short Term | Fuller Thaler vs. Siit Ultra Short |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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