Correlation Between Citigroup and Mfs New
Can any of the company-specific risk be diversified away by investing in both Citigroup and Mfs New 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 New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Mfs New Discovery, you can compare the effects of market volatilities on Citigroup and Mfs New 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 New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Mfs New.
Diversification Opportunities for Citigroup and Mfs New
Significant diversification
The 3 months correlation between Citigroup and Mfs is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Mfs New Discovery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs New Discovery 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 New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs New Discovery has no effect on the direction of Citigroup i.e., Citigroup and Mfs New go up and down completely randomly.
Pair Corralation between Citigroup and Mfs New
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.51 times more return on investment than Mfs New. However, Citigroup is 1.51 times more volatile than Mfs New Discovery. It trades about 0.08 of its potential returns per unit of risk. Mfs New Discovery is currently generating about 0.03 per unit of risk. If you would invest 4,746 in Citigroup on November 2, 2024 and sell it today you would earn a total of 3,474 from holding Citigroup or generate 73.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Mfs New Discovery
Performance |
| Timeline |
| Citigroup |
| Mfs New Discovery |
Citigroup and Mfs New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Mfs New
The main advantage of trading using opposite Citigroup and Mfs New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Mfs New 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 New will offset losses from the drop in Mfs New's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Mfs New vs. Kinetics Global Fund | Mfs New vs. Us Global Investors | Mfs New vs. Scharf Global Opportunity | Mfs New vs. Alliancebernstein Global Highome |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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