Correlation Between Citigroup and Putnam Equity
Can any of the company-specific risk be diversified away by investing in both Citigroup and Putnam 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 Putnam Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Putnam Equity Income, you can compare the effects of market volatilities on Citigroup and Putnam 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 Putnam Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Putnam Equity.
Diversification Opportunities for Citigroup and Putnam Equity
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Citigroup and Putnam is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Putnam Equity Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Equity Income 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 Putnam Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Equity Income has no effect on the direction of Citigroup i.e., Citigroup and Putnam Equity go up and down completely randomly.
Pair Corralation between Citigroup and Putnam Equity
Taking into account the 90-day investment horizon Citigroup is expected to under-perform the Putnam Equity. In addition to that, Citigroup is 3.09 times more volatile than Putnam Equity Income. It trades about -0.12 of its total potential returns per unit of risk. Putnam Equity Income is currently generating about -0.1 per unit of volatility. If you would invest 3,578 in Putnam Equity Income on November 27, 2024 and sell it today you would lose (44.00) from holding Putnam Equity Income or give up 1.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Putnam Equity Income
Performance |
| Timeline |
| Citigroup |
| Putnam Equity Income |
Citigroup and Putnam Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Putnam Equity
The main advantage of trading using opposite Citigroup and Putnam Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Putnam 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 Putnam Equity will offset losses from the drop in Putnam Equity's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Putnam Equity vs. Siit Emerging Markets | Putnam Equity vs. Jhancock Diversified Macro | Putnam Equity vs. Dws Emerging Markets | Putnam Equity vs. Rbc Emerging Markets |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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