Correlation Between Citigroup and Janus Global
Can any of the company-specific risk be diversified away by investing in both Citigroup and Janus 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 Janus Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Janus Global Unconstrained, you can compare the effects of market volatilities on Citigroup and Janus 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 Janus Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Janus Global.
Diversification Opportunities for Citigroup and Janus Global
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Janus is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Janus Global Unconstrained in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Global Unconst 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 Janus Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janus Global Unconst has no effect on the direction of Citigroup i.e., Citigroup and Janus Global go up and down completely randomly.
Pair Corralation between Citigroup and Janus Global
Taking into account the 90-day investment horizon Citigroup is expected to generate 17.18 times more return on investment than Janus Global. However, Citigroup is 17.18 times more volatile than Janus Global Unconstrained. It trades about 0.21 of its potential returns per unit of risk. Janus Global Unconstrained is currently generating about 0.16 per unit of risk. If you would invest 6,360 in Citigroup on August 29, 2024 and sell it today you would earn a total of 615.00 from holding Citigroup or generate 9.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Citigroup vs. Janus Global Unconstrained
Performance |
| Timeline |
| Citigroup |
| Janus Global Unconst |
Citigroup and Janus Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Janus Global
The main advantage of trading using opposite Citigroup and Janus Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Janus 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 Janus Global will offset losses from the drop in Janus Global's long position.The idea behind Citigroup and Janus Global Unconstrained pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Janus Global vs. Janus Research Fund | Janus Global vs. Janus Research Fund | Janus Global vs. Janus Research Fund | Janus Global vs. Janus Research Fund |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |