Correlation Between Citigroup and Us Government
Can any of the company-specific risk be diversified away by investing in both Citigroup and Us Government 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 Us Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Us Government Plus, you can compare the effects of market volatilities on Citigroup and Us Government 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 Us Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Us Government.
Diversification Opportunities for Citigroup and Us Government
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and GVPSX is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Us Government Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Us Government Plus 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 Us Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Us Government Plus has no effect on the direction of Citigroup i.e., Citigroup and Us Government go up and down completely randomly.
Pair Corralation between Citigroup and Us Government
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.69 times more return on investment than Us Government. However, Citigroup is 1.69 times more volatile than Us Government Plus. It trades about 0.07 of its potential returns per unit of risk. Us Government Plus is currently generating about 0.03 per unit of risk. If you would invest 6,079 in Citigroup on September 1, 2024 and sell it today you would earn a total of 1,008 from holding Citigroup or generate 16.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Us Government Plus
Performance |
| Timeline |
| Citigroup |
| Us Government Plus |
Citigroup and Us Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Us Government
The main advantage of trading using opposite Citigroup and Us Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Us Government 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 Us Government will offset losses from the drop in Us Government's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Us Government vs. Short Real Estate | Us Government vs. Short Real Estate | Us Government vs. Ultrashort Mid Cap Profund | Us Government vs. Ultrashort Mid Cap Profund |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |