Correlation Between Citigroup and Guggenheim Floating
Can any of the company-specific risk be diversified away by investing in both Citigroup and Guggenheim Floating 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 Guggenheim Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Guggenheim Floating Rate, you can compare the effects of market volatilities on Citigroup and Guggenheim Floating 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 Guggenheim Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Guggenheim Floating.
Diversification Opportunities for Citigroup and Guggenheim Floating
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Guggenheim is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Guggenheim Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Floating Rate 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 Guggenheim Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Floating Rate has no effect on the direction of Citigroup i.e., Citigroup and Guggenheim Floating go up and down completely randomly.
Pair Corralation between Citigroup and Guggenheim Floating
Taking into account the 90-day investment horizon Citigroup is expected to generate 9.98 times more return on investment than Guggenheim Floating. However, Citigroup is 9.98 times more volatile than Guggenheim Floating Rate. It trades about 0.1 of its potential returns per unit of risk. Guggenheim Floating Rate is currently generating about 0.19 per unit of risk. If you would invest 4,357 in Citigroup on August 26, 2024 and sell it today you would earn a total of 2,627 from holding Citigroup or generate 60.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Guggenheim Floating Rate
Performance |
| Timeline |
| Citigroup |
| Guggenheim Floating Rate |
Citigroup and Guggenheim Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Guggenheim Floating
The main advantage of trading using opposite Citigroup and Guggenheim Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Guggenheim Floating 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 Guggenheim Floating will offset losses from the drop in Guggenheim Floating's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| Guggenheim Floating vs. Prudential Health Sciences | Guggenheim Floating vs. The Gabelli Healthcare | Guggenheim Floating vs. Hartford Healthcare Hls | Guggenheim Floating vs. Lord Abbett Health |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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