Correlation Between Citigroup and Great West
Can any of the company-specific risk be diversified away by investing in both Citigroup and Great West 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 Great West into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Great West Lifeco, you can compare the effects of market volatilities on Citigroup and Great West 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 Great West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Great West.
Diversification Opportunities for Citigroup and Great West
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Great is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Great West Lifeco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Lifeco 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 Great West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Lifeco has no effect on the direction of Citigroup i.e., Citigroup and Great West go up and down completely randomly.
Pair Corralation between Citigroup and Great West
Taking into account the 90-day investment horizon Citigroup is expected to generate 4.6 times more return on investment than Great West. However, Citigroup is 4.6 times more volatile than Great West Lifeco. It trades about 0.24 of its potential returns per unit of risk. Great West Lifeco is currently generating about -0.27 per unit of risk. If you would invest 6,245 in Citigroup on August 25, 2024 and sell it today you would earn a total of 739.00 from holding Citigroup or generate 11.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Great West Lifeco
Performance |
| Timeline |
| Citigroup |
| Great West Lifeco |
Citigroup and Great West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Great West
The main advantage of trading using opposite Citigroup and Great West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Great West 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 Great West will offset losses from the drop in Great West's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Great West vs. Aya Gold Silver | Great West vs. Capstone Mining Corp | Great West vs. Rocky Mountain Liquor | Great West vs. Data Communications Management |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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