Correlation Between Citigroup and Davis New
Can any of the company-specific risk be diversified away by investing in both Citigroup and Davis New 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 Davis New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Davis New York, you can compare the effects of market volatilities on Citigroup and Davis New 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 Davis New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Davis New.
Diversification Opportunities for Citigroup and Davis New
Almost no diversification
The 3 months correlation between Citigroup and Davis is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Davis New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Davis New York 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 Davis New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Davis New York has no effect on the direction of Citigroup i.e., Citigroup and Davis New go up and down completely randomly.
Pair Corralation between Citigroup and Davis New
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.45 times more return on investment than Davis New. However, Citigroup is 1.45 times more volatile than Davis New York. It trades about -0.04 of its potential returns per unit of risk. Davis New York is currently generating about -0.09 per unit of risk. If you would invest 6,750 in Citigroup on January 10, 2025 and sell it today you would lose (335.00) from holding Citigroup or give up 4.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Citigroup vs. Davis New York
Performance |
| Timeline |
| Citigroup |
| Davis New York |
Citigroup and Davis New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Davis New
The main advantage of trading using opposite Citigroup and Davis New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Davis New 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 Davis New will offset losses from the drop in Davis New's long position.| Citigroup vs. Barclays PLC ADR | Citigroup vs. ING Group NV | Citigroup vs. Banco Santander SA | Citigroup vs. HSBC Holdings PLC |
| Davis New vs. Davis International Fund | Davis New vs. Davis International Fund | Davis New vs. Davis International Fund | Davis New vs. Davis Financial Fund |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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