Correlation Between Citigroup and Simplify Exchange
Can any of the company-specific risk be diversified away by investing in both Citigroup and Simplify Exchange 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 Simplify Exchange into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Simplify Exchange Traded, you can compare the effects of market volatilities on Citigroup and Simplify Exchange 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 Simplify Exchange. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Simplify Exchange.
Diversification Opportunities for Citigroup and Simplify Exchange
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Citigroup and Simplify is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Simplify Exchange Traded in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simplify Exchange Traded 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 Simplify Exchange. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simplify Exchange Traded has no effect on the direction of Citigroup i.e., Citigroup and Simplify Exchange go up and down completely randomly.
Pair Corralation between Citigroup and Simplify Exchange
Taking into account the 90-day investment horizon Citigroup is expected to generate 6.88 times more return on investment than Simplify Exchange. However, Citigroup is 6.88 times more volatile than Simplify Exchange Traded. It trades about 0.07 of its potential returns per unit of risk. Simplify Exchange Traded is currently generating about 0.0 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 Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Simplify Exchange Traded
Performance |
| Timeline |
| Citigroup |
| Simplify Exchange Traded |
Citigroup and Simplify Exchange Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Simplify Exchange
The main advantage of trading using opposite Citigroup and Simplify Exchange positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Simplify Exchange 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 Simplify Exchange will offset losses from the drop in Simplify Exchange's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Simplify Exchange vs. Proshares Russell 2000 | Simplify Exchange vs. Tidal Trust II | Simplify Exchange vs. PIMCO Mortgage Backed Securities | Simplify Exchange vs. iShares Trust |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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