Correlation Between Citigroup and Invesco Real
Can any of the company-specific risk be diversified away by investing in both Citigroup and Invesco Real 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 Invesco Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Invesco Real Estate, you can compare the effects of market volatilities on Citigroup and Invesco Real 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 Invesco Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Invesco Real.
Diversification Opportunities for Citigroup and Invesco Real
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Invesco is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Invesco Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Real Estate 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 Invesco Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Real Estate has no effect on the direction of Citigroup i.e., Citigroup and Invesco Real go up and down completely randomly.
Pair Corralation between Citigroup and Invesco Real
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.25 times more return on investment than Invesco Real. However, Citigroup is 2.25 times more volatile than Invesco Real Estate. It trades about 0.14 of its potential returns per unit of risk. Invesco Real Estate is currently generating about 0.0 per unit of risk. If you would invest 6,205 in Citigroup on August 29, 2024 and sell it today you would earn a total of 770.00 from holding Citigroup or generate 12.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Invesco Real Estate
Performance |
| Timeline |
| Citigroup |
| Invesco Real Estate |
Citigroup and Invesco Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Invesco Real
The main advantage of trading using opposite Citigroup and Invesco Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Invesco Real 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 Invesco Real will offset losses from the drop in Invesco Real's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Invesco Real vs. Ancorathelen Small Mid Cap | Invesco Real vs. T Rowe Price | Invesco Real vs. Champlain Mid Cap | Invesco Real vs. T Rowe Price |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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