Correlation Between Citigroup and Henderson Global
Can any of the company-specific risk be diversified away by investing in both Citigroup and Henderson Global 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 Henderson Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Henderson Global Equity, you can compare the effects of market volatilities on Citigroup and Henderson Global 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 Henderson Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Henderson Global.
Diversification Opportunities for Citigroup and Henderson Global
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Henderson is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Henderson Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Henderson Global Equity 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 Henderson Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Henderson Global Equity has no effect on the direction of Citigroup i.e., Citigroup and Henderson Global go up and down completely randomly.
Pair Corralation between Citigroup and Henderson Global
Taking into account the 90-day investment horizon Citigroup is expected to generate 3.86 times more return on investment than Henderson Global. However, Citigroup is 3.86 times more volatile than Henderson Global Equity. It trades about 0.26 of its potential returns per unit of risk. Henderson Global Equity is currently generating about 0.08 per unit of risk. If you would invest 6,361 in Citigroup on September 1, 2024 and sell it today you would earn a total of 726.00 from holding Citigroup or generate 11.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Citigroup vs. Henderson Global Equity
Performance |
| Timeline |
| Citigroup |
| Henderson Global Equity |
Citigroup and Henderson Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Henderson Global
The main advantage of trading using opposite Citigroup and Henderson Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Henderson Global 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 Henderson Global will offset losses from the drop in Henderson Global's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Henderson Global vs. Henderson Global Equity | Henderson Global vs. Thornburg Investment Income | Henderson Global vs. Aquagold International | Henderson Global vs. Thrivent High Yield |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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