Correlation Between Citigroup and Private Equity
Can any of the company-specific risk be diversified away by investing in both Citigroup and Private Equity 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 Private Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Private Equity Holding, you can compare the effects of market volatilities on Citigroup and Private Equity 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 Private Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Private Equity.
Diversification Opportunities for Citigroup and Private Equity
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citigroup and Private is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Private Equity Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Private Equity Holding 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 Private Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Private Equity Holding has no effect on the direction of Citigroup i.e., Citigroup and Private Equity go up and down completely randomly.
Pair Corralation between Citigroup and Private Equity
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.95 times more return on investment than Private Equity. However, Citigroup is 1.05 times less risky than Private Equity. It trades about 0.07 of its potential returns per unit of risk. Private Equity Holding is currently generating about 0.01 per unit of risk. If you would invest 4,684 in Citigroup on November 27, 2024 and sell it today you would earn a total of 3,281 from holding Citigroup or generate 70.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 92.49% |
| Values | Daily Returns |
Citigroup vs. Private Equity Holding
Performance |
| Timeline |
| Citigroup |
| Private Equity Holding |
Citigroup and Private Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Private Equity
The main advantage of trading using opposite Citigroup and Private Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Private Equity 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 Private Equity will offset losses from the drop in Private Equity's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Private Equity vs. Orior AG | Private Equity vs. HIAG Immobilien Holding | Private Equity vs. Bellevue Group AG | Private Equity vs. Feintool International Holding |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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