Correlation Between Citigroup and Mfs Lifetime
Can any of the company-specific risk be diversified away by investing in both Citigroup and Mfs Lifetime 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 Mfs Lifetime into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Mfs Lifetime 2065, you can compare the effects of market volatilities on Citigroup and Mfs Lifetime 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 Mfs Lifetime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Mfs Lifetime.
Diversification Opportunities for Citigroup and Mfs Lifetime
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Mfs is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Mfs Lifetime 2065 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Lifetime 2065 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 Mfs Lifetime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Lifetime 2065 has no effect on the direction of Citigroup i.e., Citigroup and Mfs Lifetime go up and down completely randomly.
Pair Corralation between Citigroup and Mfs Lifetime
Taking into account the 90-day investment horizon Citigroup is expected to generate 3.45 times more return on investment than Mfs Lifetime. However, Citigroup is 3.45 times more volatile than Mfs Lifetime 2065. It trades about 0.22 of its potential returns per unit of risk. Mfs Lifetime 2065 is currently generating about 0.14 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 656.00 from holding Citigroup or generate 10.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Mfs Lifetime 2065
Performance |
| Timeline |
| Citigroup |
| Mfs Lifetime 2065 |
Citigroup and Mfs Lifetime Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Mfs Lifetime
The main advantage of trading using opposite Citigroup and Mfs Lifetime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Mfs Lifetime 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 Mfs Lifetime will offset losses from the drop in Mfs Lifetime's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Mfs Lifetime vs. Astor Longshort Fund | Mfs Lifetime vs. T Rowe Price | Mfs Lifetime vs. California Bond Fund | Mfs Lifetime vs. Sterling Capital Short |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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