Correlation Between Citigroup and Miller Opportunity
Can any of the company-specific risk be diversified away by investing in both Citigroup and Miller Opportunity 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 Miller Opportunity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Miller Opportunity Trust, you can compare the effects of market volatilities on Citigroup and Miller Opportunity 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 Miller Opportunity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Miller Opportunity.
Diversification Opportunities for Citigroup and Miller Opportunity
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Citigroup and Miller is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Miller Opportunity Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Miller Opportunity Trust 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 Miller Opportunity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Miller Opportunity Trust has no effect on the direction of Citigroup i.e., Citigroup and Miller Opportunity go up and down completely randomly.
Pair Corralation between Citigroup and Miller Opportunity
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.21 times more return on investment than Miller Opportunity. However, Citigroup is 1.21 times more volatile than Miller Opportunity Trust. It trades about 0.08 of its potential returns per unit of risk. Miller Opportunity Trust is currently generating about 0.09 per unit of risk. If you would invest 4,525 in Citigroup on August 31, 2024 and sell it today you would earn a total of 2,562 from holding Citigroup or generate 56.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.73% |
| Values | Daily Returns |
Citigroup vs. Miller Opportunity Trust
Performance |
| Timeline |
| Citigroup |
| Miller Opportunity Trust |
Citigroup and Miller Opportunity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Miller Opportunity
The main advantage of trading using opposite Citigroup and Miller Opportunity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Miller Opportunity 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 Miller Opportunity will offset losses from the drop in Miller Opportunity's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Miller Opportunity vs. Gold And Precious | Miller Opportunity vs. Short Precious Metals | Miller Opportunity vs. Fidelity Advisor Gold | Miller Opportunity vs. Oppenheimer Gold Special |
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.
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