Correlation Between Citigroup and JPMorgan Diversified
Can any of the company-specific risk be diversified away by investing in both Citigroup and JPMorgan Diversified 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 Diversified into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and JPMorgan Diversified Return, you can compare the effects of market volatilities on Citigroup and JPMorgan Diversified 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 Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and JPMorgan Diversified.
Diversification Opportunities for Citigroup and JPMorgan Diversified
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and JPMorgan is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and JPMorgan Diversified Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Diversified 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 Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Diversified has no effect on the direction of Citigroup i.e., Citigroup and JPMorgan Diversified go up and down completely randomly.
Pair Corralation between Citigroup and JPMorgan Diversified
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.11 times more return on investment than JPMorgan Diversified. However, Citigroup is 2.11 times more volatile than JPMorgan Diversified Return. It trades about 0.07 of its potential returns per unit of risk. JPMorgan Diversified Return is currently generating about 0.06 per unit of risk. If you would invest 4,381 in Citigroup on August 31, 2024 and sell it today you would earn a total of 2,706 from holding Citigroup or generate 61.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. JPMorgan Diversified Return
Performance |
| Timeline |
| Citigroup |
| JPMorgan Diversified |
Citigroup and JPMorgan Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and JPMorgan Diversified
The main advantage of trading using opposite Citigroup and JPMorgan Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, JPMorgan Diversified 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 Diversified will offset losses from the drop in JPMorgan Diversified'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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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