Correlation Between Citigroup and Mission Valley
Can any of the company-specific risk be diversified away by investing in both Citigroup and Mission Valley 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 Mission Valley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Mission Valley Bancorp, you can compare the effects of market volatilities on Citigroup and Mission Valley 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 Mission Valley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Mission Valley.
Diversification Opportunities for Citigroup and Mission Valley
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Citigroup and Mission is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Mission Valley Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mission Valley Bancorp 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 Mission Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mission Valley Bancorp has no effect on the direction of Citigroup i.e., Citigroup and Mission Valley go up and down completely randomly.
Pair Corralation between Citigroup and Mission Valley
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.38 times more return on investment than Mission Valley. However, Citigroup is 1.38 times more volatile than Mission Valley Bancorp. It trades about 0.07 of its potential returns per unit of risk. Mission Valley Bancorp is currently generating about 0.04 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 3,397 from holding Citigroup or generate 71.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Mission Valley Bancorp
Performance |
| Timeline |
| Citigroup |
| Mission Valley Bancorp |
Citigroup and Mission Valley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Mission Valley
The main advantage of trading using opposite Citigroup and Mission Valley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Mission Valley 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 Mission Valley will offset losses from the drop in Mission Valley's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Mission Valley vs. Pacific Valley Bank | Mission Valley vs. American Business Bk | Mission Valley vs. Pinnacle Bank | Mission Valley vs. Pacific Financial Corp |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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