Correlation Between Citigroup and Gamco Global
Can any of the company-specific risk be diversified away by investing in both Citigroup and Gamco Global 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 Gamco Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Gamco Global, you can compare the effects of market volatilities on Citigroup and Gamco Global 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 Gamco Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Gamco Global.
Diversification Opportunities for Citigroup and Gamco Global
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Citigroup and Gamco is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Gamco Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamco Global 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 Gamco Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamco Global has no effect on the direction of Citigroup i.e., Citigroup and Gamco Global go up and down completely randomly.
Pair Corralation between Citigroup and Gamco Global
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.77 times more return on investment than Gamco Global. However, Citigroup is 1.77 times more volatile than Gamco Global. It trades about 0.08 of its potential returns per unit of risk. Gamco Global is currently generating about 0.07 per unit of risk. If you would invest 4,525 in Citigroup on August 31, 2024 and sell it today you would earn a total of 2,562 from holding Citigroup or generate 56.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Citigroup vs. Gamco Global
Performance |
| Timeline |
| Citigroup |
| Gamco Global |
Citigroup and Gamco Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Gamco Global
The main advantage of trading using opposite Citigroup and Gamco Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Gamco Global 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 Gamco Global will offset losses from the drop in Gamco Global's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Gamco Global vs. Gabelli Global Small | Gamco Global vs. Gabelli Convertible And | Gamco Global vs. MFS Investment Grade | Gamco Global vs. Eaton Vance National |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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