Correlation Between Citigroup and Gateway Fund
Can any of the company-specific risk be diversified away by investing in both Citigroup and Gateway Fund 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 Gateway Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Gateway Fund Class, you can compare the effects of market volatilities on Citigroup and Gateway Fund 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 Gateway Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Gateway Fund.
Diversification Opportunities for Citigroup and Gateway Fund
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Citigroup and Gateway is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Gateway Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gateway Fund Class 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 Gateway Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gateway Fund Class has no effect on the direction of Citigroup i.e., Citigroup and Gateway Fund go up and down completely randomly.
Pair Corralation between Citigroup and Gateway Fund
Taking into account the 90-day investment horizon Citigroup is expected to generate 3.79 times more return on investment than Gateway Fund. However, Citigroup is 3.79 times more volatile than Gateway Fund Class. It trades about 0.09 of its potential returns per unit of risk. Gateway Fund Class is currently generating about 0.15 per unit of risk. If you would invest 5,305 in Citigroup on September 1, 2024 and sell it today you would earn a total of 1,782 from holding Citigroup or generate 33.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.52% |
| Values | Daily Returns |
Citigroup vs. Gateway Fund Class
Performance |
| Timeline |
| Citigroup |
| Gateway Fund Class |
Citigroup and Gateway Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Gateway Fund
The main advantage of trading using opposite Citigroup and Gateway Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Gateway Fund 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 Gateway Fund will offset losses from the drop in Gateway Fund's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Gateway Fund vs. Dunham Large Cap | Gateway Fund vs. T Rowe Price | Gateway Fund vs. M Large Cap | Gateway Fund vs. Tax Managed Large Cap |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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