Correlation Between Citigroup and Mawer Global
Can any of the company-specific risk be diversified away by investing in both Citigroup and Mawer 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 Mawer Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Mawer Global Equity, you can compare the effects of market volatilities on Citigroup and Mawer 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 Mawer Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Mawer Global.
Diversification Opportunities for Citigroup and Mawer Global
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Mawer is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Mawer Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mawer Global Equity 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 Mawer Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mawer Global Equity has no effect on the direction of Citigroup i.e., Citigroup and Mawer Global go up and down completely randomly.
Pair Corralation between Citigroup and Mawer Global
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.96 times more return on investment than Mawer Global. However, Citigroup is 2.96 times more volatile than Mawer Global Equity. It trades about 0.07 of its potential returns per unit of risk. Mawer Global Equity is currently generating about 0.09 per unit of risk. If you would invest 4,293 in Citigroup on September 3, 2024 and sell it today you would earn a total of 2,794 from holding Citigroup or generate 65.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.99% |
| Values | Daily Returns |
Citigroup vs. Mawer Global Equity
Performance |
| Timeline |
| Citigroup |
| Mawer Global Equity |
Citigroup and Mawer Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Mawer Global
The main advantage of trading using opposite Citigroup and Mawer Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Mawer 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 Mawer Global will offset losses from the drop in Mawer Global's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Mawer Global vs. Mawer Canadien obligations | Mawer Global vs. Mawer Balanced | Mawer Global vs. Mawer dactions internationales | Mawer Global vs. Mawer Equity A |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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