Correlation Between Citigroup and Columbia Mid
Can any of the company-specific risk be diversified away by investing in both Citigroup and Columbia Mid 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 Columbia Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Columbia Mid Cap, you can compare the effects of market volatilities on Citigroup and Columbia Mid 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 Columbia Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Columbia Mid.
Diversification Opportunities for Citigroup and Columbia Mid
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Columbia is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Columbia Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Mid Cap 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 Columbia Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Mid Cap has no effect on the direction of Citigroup i.e., Citigroup and Columbia Mid go up and down completely randomly.
Pair Corralation between Citigroup and Columbia Mid
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.85 times more return on investment than Columbia Mid. However, Citigroup is 1.85 times more volatile than Columbia Mid Cap. It trades about -0.02 of its potential returns per unit of risk. Columbia Mid Cap is currently generating about -0.24 per unit of risk. If you would invest 8,051 in Citigroup on November 27, 2024 and sell it today you would lose (86.00) from holding Citigroup or give up 1.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Columbia Mid Cap
Performance |
| Timeline |
| Citigroup |
| Columbia Mid Cap |
Citigroup and Columbia Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Columbia Mid
The main advantage of trading using opposite Citigroup and Columbia Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Columbia Mid 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 Columbia Mid will offset losses from the drop in Columbia Mid's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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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.
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