Correlation Between Citigroup and Metropolitan West
Can any of the company-specific risk be diversified away by investing in both Citigroup and Metropolitan West 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 Metropolitan West into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Metropolitan West Flexible, you can compare the effects of market volatilities on Citigroup and Metropolitan West 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 Metropolitan West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Metropolitan West.
Diversification Opportunities for Citigroup and Metropolitan West
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Metropolitan is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Metropolitan West Flexible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metropolitan West 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 Metropolitan West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metropolitan West has no effect on the direction of Citigroup i.e., Citigroup and Metropolitan West go up and down completely randomly.
Pair Corralation between Citigroup and Metropolitan West
If you would invest 6,133 in Citigroup on August 28, 2024 and sell it today you would earn a total of 842.00 from holding Citigroup or generate 13.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Metropolitan West Flexible
Performance |
| Timeline |
| Citigroup |
| Metropolitan West |
Citigroup and Metropolitan West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Metropolitan West
The main advantage of trading using opposite Citigroup and Metropolitan West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Metropolitan West 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 Metropolitan West will offset losses from the drop in Metropolitan West's long position.The idea behind Citigroup and Metropolitan West Flexible 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.| Metropolitan West vs. Metropolitan West Alpha | Metropolitan West vs. Metropolitan West Porate | Metropolitan West vs. Metropolitan West Unconstrained | Metropolitan West vs. Metropolitan West Porate |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |