Correlation Between Citigroup and Catalyst Mlp
Can any of the company-specific risk be diversified away by investing in both Citigroup and Catalyst Mlp 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 Catalyst Mlp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Catalyst Mlp Infrastructure, you can compare the effects of market volatilities on Citigroup and Catalyst Mlp 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 Catalyst Mlp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Catalyst Mlp.
Diversification Opportunities for Citigroup and Catalyst Mlp
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Citigroup and Catalyst is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Catalyst Mlp Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Mlp Infrast 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 Catalyst Mlp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Mlp Infrast has no effect on the direction of Citigroup i.e., Citigroup and Catalyst Mlp go up and down completely randomly.
Pair Corralation between Citigroup and Catalyst Mlp
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.1 times less return on investment than Catalyst Mlp. In addition to that, Citigroup is 1.69 times more volatile than Catalyst Mlp Infrastructure. It trades about 0.08 of its total potential returns per unit of risk. Catalyst Mlp Infrastructure is currently generating about 0.15 per unit of volatility. If you would invest 1,721 in Catalyst Mlp Infrastructure on August 29, 2024 and sell it today you would earn a total of 1,263 from holding Catalyst Mlp Infrastructure or generate 73.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Catalyst Mlp Infrastructure
Performance |
| Timeline |
| Citigroup |
| Catalyst Mlp Infrast |
Citigroup and Catalyst Mlp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Catalyst Mlp
The main advantage of trading using opposite Citigroup and Catalyst Mlp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Catalyst Mlp 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 Catalyst Mlp will offset losses from the drop in Catalyst Mlp's long position.The idea behind Citigroup and Catalyst Mlp Infrastructure pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Catalyst Mlp vs. Catalystsmh High Income | Catalyst Mlp vs. Catalystsmh High Income | Catalyst Mlp vs. Catalystsmh High Income | Catalyst Mlp vs. Catalystwarrington Strategic Program |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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