Correlation Between Citigroup and Balanced Portfolio
Can any of the company-specific risk be diversified away by investing in both Citigroup and Balanced Portfolio 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 Balanced Portfolio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Balanced Portfolio Institutional, you can compare the effects of market volatilities on Citigroup and Balanced Portfolio 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 Balanced Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Balanced Portfolio.
Diversification Opportunities for Citigroup and Balanced Portfolio
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and BALANCED is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Balanced Portfolio Institution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Balanced Portfolio 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 Balanced Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Balanced Portfolio has no effect on the direction of Citigroup i.e., Citigroup and Balanced Portfolio go up and down completely randomly.
Pair Corralation between Citigroup and Balanced Portfolio
Taking into account the 90-day investment horizon Citigroup is expected to generate 4.34 times more return on investment than Balanced Portfolio. However, Citigroup is 4.34 times more volatile than Balanced Portfolio Institutional. It trades about 0.27 of its potential returns per unit of risk. Balanced Portfolio Institutional is currently generating about 0.35 per unit of risk. If you would invest 6,315 in Citigroup on September 2, 2024 and sell it today you would earn a total of 772.00 from holding Citigroup or generate 12.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Balanced Portfolio Institution
Performance |
| Timeline |
| Citigroup |
| Balanced Portfolio |
Citigroup and Balanced Portfolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Balanced Portfolio
The main advantage of trading using opposite Citigroup and Balanced Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Balanced Portfolio 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 Balanced Portfolio will offset losses from the drop in Balanced Portfolio's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Balanced Portfolio vs. Ab Select Longshort | Balanced Portfolio vs. Chartwell Short Duration | Balanced Portfolio vs. Franklin Federal Limited Term | Balanced Portfolio vs. Jhancock Short Duration |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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