Correlation Between Citigroup and Highland Small-cap
Can any of the company-specific risk be diversified away by investing in both Citigroup and Highland Small-cap 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 Highland Small-cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Highland Small Cap Equity, you can compare the effects of market volatilities on Citigroup and Highland Small-cap 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 Highland Small-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Highland Small-cap.
Diversification Opportunities for Citigroup and Highland Small-cap
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Citigroup and Highland is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Highland Small Cap Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highland Small Cap 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 Highland Small-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highland Small Cap has no effect on the direction of Citigroup i.e., Citigroup and Highland Small-cap go up and down completely randomly.
Pair Corralation between Citigroup and Highland Small-cap
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.49 times more return on investment than Highland Small-cap. However, Citigroup is 1.49 times more volatile than Highland Small Cap Equity. It trades about 0.13 of its potential returns per unit of risk. Highland Small Cap Equity is currently generating about -0.21 per unit of risk. If you would invest 8,111 in Citigroup on November 22, 2024 and sell it today you would earn a total of 283.00 from holding Citigroup or generate 3.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Highland Small Cap Equity
Performance |
| Timeline |
| Citigroup |
| Highland Small Cap |
Citigroup and Highland Small-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Highland Small-cap
The main advantage of trading using opposite Citigroup and Highland Small-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Highland Small-cap 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 Highland Small-cap will offset losses from the drop in Highland Small-cap's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Highland Small-cap vs. Franklin Emerging Market | Highland Small-cap vs. Mondrian Emerging Markets | Highland Small-cap vs. Delaware Emerging Markets | Highland Small-cap vs. Siit Emerging Markets |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |