Correlation Between Citigroup and Gmo Emerging
Can any of the company-specific risk be diversified away by investing in both Citigroup and Gmo Emerging 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 Gmo Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Gmo Emerging Markets, you can compare the effects of market volatilities on Citigroup and Gmo Emerging 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 Gmo Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Gmo Emerging.
Diversification Opportunities for Citigroup and Gmo Emerging
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Citigroup and Gmo is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Gmo Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo Emerging Markets 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 Gmo Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo Emerging Markets has no effect on the direction of Citigroup i.e., Citigroup and Gmo Emerging go up and down completely randomly.
Pair Corralation between Citigroup and Gmo Emerging
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.75 times more return on investment than Gmo Emerging. However, Citigroup is 2.75 times more volatile than Gmo Emerging Markets. It trades about 0.21 of its potential returns per unit of risk. Gmo Emerging Markets is currently generating about -0.21 per unit of risk. If you would invest 6,360 in Citigroup on August 29, 2024 and sell it today you would earn a total of 615.00 from holding Citigroup or generate 9.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Gmo Emerging Markets
Performance |
| Timeline |
| Citigroup |
| Gmo Emerging Markets |
Citigroup and Gmo Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Gmo Emerging
The main advantage of trading using opposite Citigroup and Gmo Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Gmo Emerging 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 Gmo Emerging will offset losses from the drop in Gmo Emerging's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Gmo Emerging vs. Mutual Of America | Gmo Emerging vs. Lord Abbett Small | Gmo Emerging vs. Vanguard Small Cap Value | Gmo Emerging vs. Ultramid Cap Profund Ultramid 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |