Correlation Between Citigroup and Mm Sp
Can any of the company-specific risk be diversified away by investing in both Citigroup and Mm Sp 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 Mm Sp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Mm Sp 500, you can compare the effects of market volatilities on Citigroup and Mm Sp 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 Mm Sp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Mm Sp.
Diversification Opportunities for Citigroup and Mm Sp
Very poor diversification
The 3 months correlation between Citigroup and MMIZX is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Mm Sp 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mm Sp 500 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 Mm Sp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mm Sp 500 has no effect on the direction of Citigroup i.e., Citigroup and Mm Sp go up and down completely randomly.
Pair Corralation between Citigroup and Mm Sp
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.76 times more return on investment than Mm Sp. However, Citigroup is 2.76 times more volatile than Mm Sp 500. It trades about 0.32 of its potential returns per unit of risk. Mm Sp 500 is currently generating about 0.37 per unit of risk. If you would invest 6,235 in Citigroup on September 3, 2024 and sell it today you would earn a total of 852.00 from holding Citigroup or generate 13.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Mm Sp 500
Performance |
| Timeline |
| Citigroup |
| Mm Sp 500 |
Citigroup and Mm Sp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Mm Sp
The main advantage of trading using opposite Citigroup and Mm Sp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Mm Sp 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 Mm Sp will offset losses from the drop in Mm Sp's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Mm Sp vs. Legg Mason Global | Mm Sp vs. Dreyfusstandish Global Fixed | Mm Sp vs. Ab Global Risk | Mm Sp vs. Mirova Global Green |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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