Correlation Between Citigroup and Retirement Living
Can any of the company-specific risk be diversified away by investing in both Citigroup and Retirement Living 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 Retirement Living into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Retirement Living Through, you can compare the effects of market volatilities on Citigroup and Retirement Living 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 Retirement Living. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Retirement Living.
Diversification Opportunities for Citigroup and Retirement Living
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Citigroup and Retirement is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Retirement Living Through in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retirement Living Through 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 Retirement Living. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retirement Living Through has no effect on the direction of Citigroup i.e., Citigroup and Retirement Living go up and down completely randomly.
Pair Corralation between Citigroup and Retirement Living
Taking into account the 90-day investment horizon Citigroup is expected to generate 3.54 times more return on investment than Retirement Living. However, Citigroup is 3.54 times more volatile than Retirement Living Through. It trades about 0.07 of its potential returns per unit of risk. Retirement Living Through is currently generating about 0.08 per unit of risk. If you would invest 4,118 in Citigroup on August 29, 2024 and sell it today you would earn a total of 2,898 from holding Citigroup or generate 70.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Retirement Living Through
Performance |
| Timeline |
| Citigroup |
| Retirement Living Through |
Citigroup and Retirement Living Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Retirement Living
The main advantage of trading using opposite Citigroup and Retirement Living positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Retirement Living 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 Retirement Living will offset losses from the drop in Retirement Living's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Retirement Living vs. Dreyfusstandish Global Fixed | Retirement Living vs. Ms Global Fixed | Retirement Living vs. Fisher Fixed Income | Retirement Living vs. Ultra Short Fixed Income |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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