Correlation Between Citigroup and Equity Income
Can any of the company-specific risk be diversified away by investing in both Citigroup and Equity 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 Equity Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Equity Income Fund, you can compare the effects of market volatilities on Citigroup and Equity 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 Equity Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Equity Income.
Diversification Opportunities for Citigroup and Equity Income
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Equity is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Equity Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equity Income 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 Equity Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equity Income has no effect on the direction of Citigroup i.e., Citigroup and Equity Income go up and down completely randomly.
Pair Corralation between Citigroup and Equity Income
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.2 times more return on investment than Equity Income. However, Citigroup is 2.2 times more volatile than Equity Income Fund. It trades about 0.08 of its potential returns per unit of risk. Equity Income Fund is currently generating about 0.06 per unit of risk. If you would invest 4,091 in Citigroup on September 14, 2024 and sell it today you would earn a total of 3,029 from holding Citigroup or generate 74.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Citigroup vs. Equity Income Fund
Performance |
| Timeline |
| Citigroup |
| Equity Income |
Citigroup and Equity Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Equity Income
The main advantage of trading using opposite Citigroup and Equity Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Equity 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 Equity Income will offset losses from the drop in Equity Income's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Equity Income vs. Europac Gold Fund | Equity Income vs. Global Gold Fund | Equity Income vs. Oppenheimer Gold Special | Equity Income vs. Gamco Global Gold |
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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |