Correlation Between Citigroup and Pimco Emerging
Can any of the company-specific risk be diversified away by investing in both Citigroup and Pimco Emerging 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 Pimco Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Pimco Emerging Local, you can compare the effects of market volatilities on Citigroup and Pimco Emerging 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 Pimco Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Pimco Emerging.
Diversification Opportunities for Citigroup and Pimco Emerging
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and Pimco is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Pimco Emerging Local in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Emerging Local 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 Pimco Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Emerging Local has no effect on the direction of Citigroup i.e., Citigroup and Pimco Emerging go up and down completely randomly.
Pair Corralation between Citigroup and Pimco Emerging
Taking into account the 90-day investment horizon Citigroup is expected to generate 4.23 times more return on investment than Pimco Emerging. However, Citigroup is 4.23 times more volatile than Pimco Emerging Local. It trades about 0.07 of its potential returns per unit of risk. Pimco Emerging Local is currently generating about 0.04 per unit of risk. If you would invest 6,064 in Citigroup on September 3, 2024 and sell it today you would earn a total of 1,023 from holding Citigroup or generate 16.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Pimco Emerging Local
Performance |
| Timeline |
| Citigroup |
| Pimco Emerging Local |
Citigroup and Pimco Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Pimco Emerging
The main advantage of trading using opposite Citigroup and Pimco Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Pimco Emerging 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 Pimco Emerging will offset losses from the drop in Pimco Emerging's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Pimco Emerging vs. Siit Ultra Short | Pimco Emerging vs. Astor Longshort Fund | Pimco Emerging vs. Limited Term Tax | Pimco Emerging vs. Quantitative Longshort Equity |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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