Correlation Between Citigroup and Pacer Lunt
Can any of the company-specific risk be diversified away by investing in both Citigroup and Pacer Lunt 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 Pacer Lunt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Pacer Lunt MidCap, you can compare the effects of market volatilities on Citigroup and Pacer Lunt 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 Pacer Lunt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Pacer Lunt.
Diversification Opportunities for Citigroup and Pacer Lunt
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Citigroup and Pacer is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Pacer Lunt MidCap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Lunt MidCap 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 Pacer Lunt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Lunt MidCap has no effect on the direction of Citigroup i.e., Citigroup and Pacer Lunt go up and down completely randomly.
Pair Corralation between Citigroup and Pacer Lunt
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.63 times more return on investment than Pacer Lunt. However, Citigroup is 1.63 times more volatile than Pacer Lunt MidCap. It trades about 0.11 of its potential returns per unit of risk. Pacer Lunt MidCap is currently generating about 0.15 per unit of risk. If you would invest 4,676 in Citigroup on September 2, 2024 and sell it today you would earn a total of 2,411 from holding Citigroup or generate 51.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Pacer Lunt MidCap
Performance |
| Timeline |
| Citigroup |
| Pacer Lunt MidCap |
Citigroup and Pacer Lunt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Pacer Lunt
The main advantage of trading using opposite Citigroup and Pacer Lunt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Pacer Lunt 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 Pacer Lunt will offset losses from the drop in Pacer Lunt's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Pacer Lunt vs. Pacer Lunt Large | Pacer Lunt vs. Pacer Lunt Large | Pacer Lunt vs. Pacer Trendpilot Bond | Pacer Lunt vs. Pacer Cash Cows |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |