Correlation Between Citigroup and Invesco Total
Can any of the company-specific risk be diversified away by investing in both Citigroup and Invesco Total 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 Invesco Total into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Invesco Total Return, you can compare the effects of market volatilities on Citigroup and Invesco Total 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 Invesco Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Invesco Total.
Diversification Opportunities for Citigroup and Invesco Total
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Invesco is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Invesco Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Total Return 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 Invesco Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Total Return has no effect on the direction of Citigroup i.e., Citigroup and Invesco Total go up and down completely randomly.
Pair Corralation between Citigroup and Invesco Total
Taking into account the 90-day investment horizon Citigroup is expected to generate 6.84 times more return on investment than Invesco Total. However, Citigroup is 6.84 times more volatile than Invesco Total Return. It trades about 0.45 of its potential returns per unit of risk. Invesco Total Return is currently generating about 0.04 per unit of risk. If you would invest 6,977 in Citigroup on October 23, 2024 and sell it today you would earn a total of 1,190 from holding Citigroup or generate 17.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Citigroup vs. Invesco Total Return
Performance |
| Timeline |
| Citigroup |
| Invesco Total Return |
Citigroup and Invesco Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Invesco Total
The main advantage of trading using opposite Citigroup and Invesco Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Invesco Total 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 Invesco Total will offset losses from the drop in Invesco Total's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Invesco Total vs. Fidelity Total Bond | Invesco Total vs. PIMCO Enhanced Low | Invesco Total vs. iShares Yield Optimized | Invesco Total vs. Invesco Variable Rate |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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