Correlation Between Citigroup and Government Street
Can any of the company-specific risk be diversified away by investing in both Citigroup and Government Street 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 Government Street into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Government Street Mid Cap, you can compare the effects of market volatilities on Citigroup and Government Street 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 Government Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Government Street.
Diversification Opportunities for Citigroup and Government Street
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Government is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Government Street Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Government Street Mid 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 Government Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Government Street Mid has no effect on the direction of Citigroup i.e., Citigroup and Government Street go up and down completely randomly.
Pair Corralation between Citigroup and Government Street
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.38 times more return on investment than Government Street. However, Citigroup is 2.38 times more volatile than Government Street Mid Cap. It trades about 0.4 of its potential returns per unit of risk. Government Street Mid Cap is currently generating about 0.19 per unit of risk. If you would invest 6,977 in Citigroup on October 22, 2024 and sell it today you would earn a total of 1,022 from holding Citigroup or generate 14.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Citigroup vs. Government Street Mid Cap
Performance |
| Timeline |
| Citigroup |
| Government Street Mid |
Citigroup and Government Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Government Street
The main advantage of trading using opposite Citigroup and Government Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Government Street 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 Government Street will offset losses from the drop in Government Street's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Government Street vs. Government Street Equity | Government Street vs. Federated Mdt Mid Cap | Government Street vs. Janus Enterprise Fund | Government Street vs. Victory Integrity Mid 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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