Correlation Between Citigroup and Millennium Investment
Can any of the company-specific risk be diversified away by investing in both Citigroup and Millennium Investment 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 Millennium Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Millennium Investment Acquisition, you can compare the effects of market volatilities on Citigroup and Millennium Investment 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 Millennium Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Millennium Investment.
Diversification Opportunities for Citigroup and Millennium Investment
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citigroup and Millennium is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Millennium Investment Acquisit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Millennium Investment 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 Millennium Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Millennium Investment has no effect on the direction of Citigroup i.e., Citigroup and Millennium Investment go up and down completely randomly.
Pair Corralation between Citigroup and Millennium Investment
Taking into account the 90-day investment horizon Citigroup is expected to generate 9.51 times less return on investment than Millennium Investment. But when comparing it to its historical volatility, Citigroup is 12.85 times less risky than Millennium Investment. It trades about 0.07 of its potential returns per unit of risk. Millennium Investment Acquisition is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 17.00 in Millennium Investment Acquisition on August 27, 2024 and sell it today you would lose (16.97) from holding Millennium Investment Acquisition or give up 99.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Millennium Investment Acquisit
Performance |
| Timeline |
| Citigroup |
| Millennium Investment |
Citigroup and Millennium Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Millennium Investment
The main advantage of trading using opposite Citigroup and Millennium Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Millennium Investment 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 Millennium Investment will offset losses from the drop in Millennium Investment's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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