Correlation Between Citigroup and PEAK Old
Can any of the company-specific risk be diversified away by investing in both Citigroup and PEAK Old 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 PEAK Old into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and PEAK Old, you can compare the effects of market volatilities on Citigroup and PEAK Old 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 PEAK Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and PEAK Old.
Diversification Opportunities for Citigroup and PEAK Old
Modest diversification
The 3 months correlation between Citigroup and PEAK is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and PEAK Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PEAK Old 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 PEAK Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PEAK Old has no effect on the direction of Citigroup i.e., Citigroup and PEAK Old go up and down completely randomly.
Pair Corralation between Citigroup and PEAK Old
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.03 times more return on investment than PEAK Old. However, Citigroup is 1.03 times more volatile than PEAK Old. It trades about 0.07 of its potential returns per unit of risk. PEAK Old is currently generating about -0.04 per unit of risk. If you would invest 4,117 in Citigroup on August 28, 2024 and sell it today you would earn a total of 2,958 from holding Citigroup or generate 71.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 31.72% |
| Values | Daily Returns |
Citigroup vs. PEAK Old
Performance |
| Timeline |
| Citigroup |
| PEAK Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Citigroup and PEAK Old Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and PEAK Old
The main advantage of trading using opposite Citigroup and PEAK Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, PEAK Old 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 PEAK Old will offset losses from the drop in PEAK Old's long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
| PEAK Old vs. Welltower | PEAK Old vs. Mid America Apartment Communities | PEAK Old vs. Regency Centers | PEAK Old vs. UDR Inc |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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