Correlation Between Citigroup and Nuveen Preferred
Can any of the company-specific risk be diversified away by investing in both Citigroup and Nuveen Preferred 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 Nuveen Preferred into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Nuveen Preferred Securities, you can compare the effects of market volatilities on Citigroup and Nuveen Preferred 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 Nuveen Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Nuveen Preferred.
Diversification Opportunities for Citigroup and Nuveen Preferred
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Citigroup and Nuveen is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Nuveen Preferred Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Preferred Sec 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 Nuveen Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Preferred Sec has no effect on the direction of Citigroup i.e., Citigroup and Nuveen Preferred go up and down completely randomly.
Pair Corralation between Citigroup and Nuveen Preferred
Taking into account the 90-day investment horizon Citigroup is expected to generate 9.27 times more return on investment than Nuveen Preferred. However, Citigroup is 9.27 times more volatile than Nuveen Preferred Securities. It trades about 0.1 of its potential returns per unit of risk. Nuveen Preferred Securities is currently generating about 0.2 per unit of risk. If you would invest 4,959 in Citigroup on August 25, 2024 and sell it today you would earn a total of 2,025 from holding Citigroup or generate 40.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Nuveen Preferred Securities
Performance |
| Timeline |
| Citigroup |
| Nuveen Preferred Sec |
Citigroup and Nuveen Preferred Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Nuveen Preferred
The main advantage of trading using opposite Citigroup and Nuveen Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Nuveen Preferred 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 Nuveen Preferred will offset losses from the drop in Nuveen Preferred's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| Nuveen Preferred vs. Nuveen Small Cap | Nuveen Preferred vs. Nuveen Real Estate | Nuveen Preferred vs. Nuveen Real Estate | Nuveen Preferred vs. Nuveen Preferred Securities |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |