Correlation Between Citigroup and Marcus
Can any of the company-specific risk be diversified away by investing in both Citigroup and Marcus 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 Marcus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Marcus, you can compare the effects of market volatilities on Citigroup and Marcus 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 Marcus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Marcus.
Diversification Opportunities for Citigroup and Marcus
Very poor diversification
The 3 months correlation between Citigroup and Marcus is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Marcus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marcus 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 Marcus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marcus has no effect on the direction of Citigroup i.e., Citigroup and Marcus go up and down completely randomly.
Pair Corralation between Citigroup and Marcus
Taking into account the 90-day investment horizon Citigroup is expected to generate 3.01 times less return on investment than Marcus. But when comparing it to its historical volatility, Citigroup is 1.38 times less risky than Marcus. It trades about 0.21 of its potential returns per unit of risk. Marcus is currently generating about 0.46 of returns per unit of risk over similar time horizon. If you would invest 1,621 in Marcus on August 24, 2024 and sell it today you would earn a total of 561.00 from holding Marcus or generate 34.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Marcus
Performance |
| Timeline |
| Citigroup |
| Marcus |
Citigroup and Marcus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Marcus
The main advantage of trading using opposite Citigroup and Marcus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Marcus 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 Marcus will offset losses from the drop in Marcus' long position.| Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Royal Bank of | Citigroup vs. JPMorgan Chase Co |
| Marcus vs. News Corp A | Marcus vs. Liberty Media | Marcus vs. Warner Music Group | Marcus vs. Fox Corp Class |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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