Correlation Between Citigroup and Invesco Income
Can any of the company-specific risk be diversified away by investing in both Citigroup and Invesco Income 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 Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Invesco Income Allocation, you can compare the effects of market volatilities on Citigroup and Invesco Income 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 Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Invesco Income.
Diversification Opportunities for Citigroup and Invesco Income
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Citigroup and Invesco is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Invesco Income Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Income Allocation 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 Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Income Allocation has no effect on the direction of Citigroup i.e., Citigroup and Invesco Income go up and down completely randomly.
Pair Corralation between Citigroup and Invesco Income
Taking into account the 90-day investment horizon Citigroup is expected to generate 4.21 times more return on investment than Invesco Income. However, Citigroup is 4.21 times more volatile than Invesco Income Allocation. It trades about 0.08 of its potential returns per unit of risk. Invesco Income Allocation is currently generating about 0.08 per unit of risk. If you would invest 4,362 in Citigroup on August 30, 2024 and sell it today you would earn a total of 2,654 from holding Citigroup or generate 60.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Invesco Income Allocation
Performance |
| Timeline |
| Citigroup |
| Invesco Income Allocation |
Citigroup and Invesco Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Invesco Income
The main advantage of trading using opposite Citigroup and Invesco Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Invesco Income 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 Income will offset losses from the drop in Invesco Income's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Invesco Income vs. Pace Large Value | Invesco Income vs. Washington Mutual Investors | Invesco Income vs. Goldman Sachs Large | Invesco Income vs. Vanguard Equity Income |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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