Correlation Between Citigroup and Mfs Utilities
Can any of the company-specific risk be diversified away by investing in both Citigroup and Mfs Utilities 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 Mfs Utilities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Mfs Utilities Fund, you can compare the effects of market volatilities on Citigroup and Mfs Utilities 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 Mfs Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Mfs Utilities.
Diversification Opportunities for Citigroup and Mfs Utilities
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Citigroup and Mfs is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Mfs Utilities Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Utilities 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 Mfs Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Utilities has no effect on the direction of Citigroup i.e., Citigroup and Mfs Utilities go up and down completely randomly.
Pair Corralation between Citigroup and Mfs Utilities
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.24 times more return on investment than Mfs Utilities. However, Citigroup is 2.24 times more volatile than Mfs Utilities Fund. It trades about 0.07 of its potential returns per unit of risk. Mfs Utilities Fund is currently generating about 0.11 per unit of risk. If you would invest 6,079 in Citigroup on September 1, 2024 and sell it today you would earn a total of 1,008 from holding Citigroup or generate 16.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Citigroup vs. Mfs Utilities Fund
Performance |
| Timeline |
| Citigroup |
| Mfs Utilities |
Citigroup and Mfs Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Mfs Utilities
The main advantage of trading using opposite Citigroup and Mfs Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Mfs Utilities 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 Mfs Utilities will offset losses from the drop in Mfs Utilities' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Mfs Utilities vs. Dominion Energy | Mfs Utilities vs. Atlantica Sustainable Infrastructure | Mfs Utilities vs. Consolidated Edison | Mfs Utilities vs. Eversource Energy |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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