Correlation Between Citigroup and JPMorgan Global
Can any of the company-specific risk be diversified away by investing in both Citigroup and JPMorgan Global 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 JPMorgan Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and JPMorgan Global Select, you can compare the effects of market volatilities on Citigroup and JPMorgan Global 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 JPMorgan Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and JPMorgan Global.
Diversification Opportunities for Citigroup and JPMorgan Global
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citigroup and JPMorgan is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and JPMorgan Global Select in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Global Select 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 JPMorgan Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Global Select has no effect on the direction of Citigroup i.e., Citigroup and JPMorgan Global go up and down completely randomly.
Pair Corralation between Citigroup and JPMorgan Global
Taking into account the 90-day investment horizon Citigroup is expected to under-perform the JPMorgan Global. In addition to that, Citigroup is 2.91 times more volatile than JPMorgan Global Select. It trades about -0.02 of its total potential returns per unit of risk. JPMorgan Global Select is currently generating about -0.02 per unit of volatility. If you would invest 6,190 in JPMorgan Global Select on November 27, 2024 and sell it today you would lose (16.00) from holding JPMorgan Global Select or give up 0.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. JPMorgan Global Select
Performance |
| Timeline |
| Citigroup |
| JPMorgan Global Select |
Citigroup and JPMorgan Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and JPMorgan Global
The main advantage of trading using opposite Citigroup and JPMorgan Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, JPMorgan Global 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 JPMorgan Global will offset losses from the drop in JPMorgan Global's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| JPMorgan Global vs. FT Vest Equity | JPMorgan Global vs. Northern Lights | JPMorgan Global vs. Dimensional International High | JPMorgan Global vs. First Trust Exchange Traded |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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