Correlation Between Citigroup and Hartford Financial
Can any of the company-specific risk be diversified away by investing in both Citigroup and Hartford Financial 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 Hartford Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and The Hartford Financial, you can compare the effects of market volatilities on Citigroup and Hartford Financial 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 Hartford Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Hartford Financial.
Diversification Opportunities for Citigroup and Hartford Financial
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Hartford is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and The Hartford Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Hartford Financial 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 Hartford Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Hartford Financial has no effect on the direction of Citigroup i.e., Citigroup and Hartford Financial go up and down completely randomly.
Pair Corralation between Citigroup and Hartford Financial
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.17 times more return on investment than Hartford Financial. However, Citigroup is 1.17 times more volatile than The Hartford Financial. It trades about 0.32 of its potential returns per unit of risk. The Hartford Financial is currently generating about 0.33 per unit of risk. If you would invest 6,235 in Citigroup on September 5, 2024 and sell it today you would earn a total of 915.00 from holding Citigroup or generate 14.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Citigroup vs. The Hartford Financial
Performance |
| Timeline |
| Citigroup |
| The Hartford Financial |
Citigroup and Hartford Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Hartford Financial
The main advantage of trading using opposite Citigroup and Hartford Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Hartford Financial 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 Hartford Financial will offset losses from the drop in Hartford Financial's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Hartford Financial vs. Berkshire Hathaway | Hartford Financial vs. AXA SA | Hartford Financial vs. AXA SA | Hartford Financial vs. Swiss Life Holding |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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