Correlation Between Citigroup and Muzinich
Can any of the company-specific risk be diversified away by investing in both Citigroup and Muzinich 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 Muzinich into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Muzinich High Yield, you can compare the effects of market volatilities on Citigroup and Muzinich 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 Muzinich. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Muzinich.
Diversification Opportunities for Citigroup and Muzinich
Very weak diversification
The 3 months correlation between Citigroup and Muzinich is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Muzinich High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Muzinich High Yield 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 Muzinich. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Muzinich High Yield has no effect on the direction of Citigroup i.e., Citigroup and Muzinich go up and down completely randomly.
Pair Corralation between Citigroup and Muzinich
Taking into account the 90-day investment horizon Citigroup is expected to generate 13.41 times more return on investment than Muzinich. However, Citigroup is 13.41 times more volatile than Muzinich High Yield. It trades about 0.07 of its potential returns per unit of risk. Muzinich High Yield is currently generating about 0.25 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 | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Citigroup vs. Muzinich High Yield
Performance |
| Timeline |
| Citigroup |
| Muzinich High Yield |
Citigroup and Muzinich Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Muzinich
The main advantage of trading using opposite Citigroup and Muzinich positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Muzinich 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 Muzinich will offset losses from the drop in Muzinich's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Muzinich vs. Muzinich Credit Opportunities | Muzinich vs. Muzinich Low Duration | Muzinich vs. Fidelity Advisor Balanced | Muzinich vs. Schwab Sp 500 |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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