Correlation Between Citigroup and Transamerica Short-term
Can any of the company-specific risk be diversified away by investing in both Citigroup and Transamerica Short-term 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 Transamerica Short-term into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Transamerica Short Term Bond, you can compare the effects of market volatilities on Citigroup and Transamerica Short-term 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 Transamerica Short-term. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Transamerica Short-term.
Diversification Opportunities for Citigroup and Transamerica Short-term
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Transamerica is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Transamerica Short Term Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Short Term 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 Transamerica Short-term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Short Term has no effect on the direction of Citigroup i.e., Citigroup and Transamerica Short-term go up and down completely randomly.
Pair Corralation between Citigroup and Transamerica Short-term
Taking into account the 90-day investment horizon Citigroup is expected to generate 16.83 times more return on investment than Transamerica Short-term. However, Citigroup is 16.83 times more volatile than Transamerica Short Term Bond. It trades about 0.14 of its potential returns per unit of risk. Transamerica Short Term Bond is currently generating about -0.13 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. Transamerica Short Term Bond
Performance |
| Timeline |
| Citigroup |
| Transamerica Short Term |
Citigroup and Transamerica Short-term Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Transamerica Short-term
The main advantage of trading using opposite Citigroup and Transamerica Short-term positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Transamerica Short-term 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 Transamerica Short-term will offset losses from the drop in Transamerica Short-term's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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