Correlation Between Citigroup and Salient International
Can any of the company-specific risk be diversified away by investing in both Citigroup and Salient International 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 Salient International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Salient International Real, you can compare the effects of market volatilities on Citigroup and Salient International 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 Salient International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Salient International.
Diversification Opportunities for Citigroup and Salient International
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Salient is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Salient International Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salient International 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 Salient International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salient International has no effect on the direction of Citigroup i.e., Citigroup and Salient International go up and down completely randomly.
Pair Corralation between Citigroup and Salient International
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.04 times more return on investment than Salient International. However, Citigroup is 2.04 times more volatile than Salient International Real. It trades about 0.09 of its potential returns per unit of risk. Salient International Real is currently generating about 0.06 per unit of risk. If you would invest 5,476 in Citigroup on September 1, 2024 and sell it today you would earn a total of 1,611 from holding Citigroup or generate 29.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.47% |
| Values | Daily Returns |
Citigroup vs. Salient International Real
Performance |
| Timeline |
| Citigroup |
| Salient International |
Citigroup and Salient International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Salient International
The main advantage of trading using opposite Citigroup and Salient International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Salient International 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 Salient International will offset losses from the drop in Salient International's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Salient International vs. Salient Tactical Plus | Salient International vs. Salient Tactical Plus | Salient International vs. Salient Tactical Growth | Salient International vs. Salient Tactical Growth |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |