Correlation Between Citigroup and Fixed Income
Can any of the company-specific risk be diversified away by investing in both Citigroup and Fixed Income 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 Fixed Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and The Fixed Income, you can compare the effects of market volatilities on Citigroup and Fixed Income 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 Fixed Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Fixed Income.
Diversification Opportunities for Citigroup and Fixed Income
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Citigroup and Fixed is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and The Fixed Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fixed Income 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 Fixed Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fixed Income has no effect on the direction of Citigroup i.e., Citigroup and Fixed Income go up and down completely randomly.
Pair Corralation between Citigroup and Fixed Income
Taking into account the 90-day investment horizon Citigroup is expected to generate 4.32 times more return on investment than Fixed Income. However, Citigroup is 4.32 times more volatile than The Fixed Income. It trades about 0.22 of its potential returns per unit of risk. The Fixed Income is currently generating about 0.34 per unit of risk. If you would invest 6,980 in Citigroup on September 12, 2024 and sell it today you would earn a total of 270.00 from holding Citigroup or generate 3.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. The Fixed Income
Performance |
| Timeline |
| Citigroup |
| Fixed Income |
Citigroup and Fixed Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Fixed Income
The main advantage of trading using opposite Citigroup and Fixed Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Fixed Income 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 Fixed Income will offset losses from the drop in Fixed Income's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Fixed Income vs. Goldman Sachs Government | Fixed Income vs. Davis Government Bond | Fixed Income vs. Inverse Government Long | Fixed Income vs. Schwab Government Money |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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