Correlation Between Citigroup and Mainstay Growth
Can any of the company-specific risk be diversified away by investing in both Citigroup and Mainstay Growth 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 Mainstay Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Mainstay Growth Allocation, you can compare the effects of market volatilities on Citigroup and Mainstay Growth 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 Mainstay Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Mainstay Growth.
Diversification Opportunities for Citigroup and Mainstay Growth
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Mainstay is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Mainstay Growth Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Growth Allo 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 Mainstay Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Growth Allo has no effect on the direction of Citigroup i.e., Citigroup and Mainstay Growth go up and down completely randomly.
Pair Corralation between Citigroup and Mainstay Growth
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.45 times more return on investment than Mainstay Growth. However, Citigroup is 2.45 times more volatile than Mainstay Growth Allocation. It trades about 0.41 of its potential returns per unit of risk. Mainstay Growth Allocation is currently generating about 0.23 per unit of risk. If you would invest 6,994 in Citigroup on November 3, 2024 and sell it today you would earn a total of 1,149 from holding Citigroup or generate 16.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Mainstay Growth Allocation
Performance |
| Timeline |
| Citigroup |
| Mainstay Growth Allo |
Citigroup and Mainstay Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Mainstay Growth
The main advantage of trading using opposite Citigroup and Mainstay Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Mainstay Growth 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 Mainstay Growth will offset losses from the drop in Mainstay Growth's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Mainstay Growth vs. Blackrock Moderate Prepared | Mainstay Growth vs. Wilmington Trust Retirement | Mainstay Growth vs. Franklin Lifesmart Retirement | Mainstay Growth vs. Columbia Moderate Growth |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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