Correlation Between Citigroup and Quantitative
Can any of the company-specific risk be diversified away by investing in both Citigroup and Quantitative 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 Quantitative into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Quantitative U S, you can compare the effects of market volatilities on Citigroup and Quantitative 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 Quantitative. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Quantitative.
Diversification Opportunities for Citigroup and Quantitative
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Quantitative is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Quantitative U S in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quantitative U S 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 Quantitative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quantitative U S has no effect on the direction of Citigroup i.e., Citigroup and Quantitative go up and down completely randomly.
Pair Corralation between Citigroup and Quantitative
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.26 times more return on investment than Quantitative. However, Citigroup is 1.26 times more volatile than Quantitative U S. It trades about 0.07 of its potential returns per unit of risk. Quantitative U S is currently generating about 0.06 per unit of risk. If you would invest 4,134 in Citigroup on August 30, 2024 and sell it today you would earn a total of 2,882 from holding Citigroup or generate 69.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Quantitative U S
Performance |
| Timeline |
| Citigroup |
| Quantitative U S |
Citigroup and Quantitative Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Quantitative
The main advantage of trading using opposite Citigroup and Quantitative positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Quantitative 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 Quantitative will offset losses from the drop in Quantitative's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Quantitative vs. Dunham Large Cap | Quantitative vs. Aqr Large Cap | Quantitative vs. Fidelity Series 1000 | Quantitative vs. Qs 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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