Correlation Between Citigroup and BNY Mellon
Can any of the company-specific risk be diversified away by investing in both Citigroup and BNY Mellon 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 BNY Mellon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and BNY Mellon Strategic, you can compare the effects of market volatilities on Citigroup and BNY Mellon 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 BNY Mellon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and BNY Mellon.
Diversification Opportunities for Citigroup and BNY Mellon
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and BNY is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and BNY Mellon Strategic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNY Mellon Strategic 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 BNY Mellon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BNY Mellon Strategic has no effect on the direction of Citigroup i.e., Citigroup and BNY Mellon go up and down completely randomly.
Pair Corralation between Citigroup and BNY Mellon
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.41 times more return on investment than BNY Mellon. However, Citigroup is 2.41 times more volatile than BNY Mellon Strategic. It trades about 0.12 of its potential returns per unit of risk. BNY Mellon Strategic is currently generating about 0.08 per unit of risk. If you would invest 4,004 in Citigroup on September 12, 2024 and sell it today you would earn a total of 3,200 from holding Citigroup or generate 79.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. BNY Mellon Strategic
Performance |
| Timeline |
| Citigroup |
| BNY Mellon Strategic |
Citigroup and BNY Mellon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and BNY Mellon
The main advantage of trading using opposite Citigroup and BNY Mellon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, BNY Mellon 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 BNY Mellon will offset losses from the drop in BNY Mellon's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| BNY Mellon vs. Blackrock Muniholdings Closed | BNY Mellon vs. DTF Tax Free | BNY Mellon vs. John Hancock Income | BNY Mellon vs. MFS Investment Grade |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |