Correlation Between Citigroup and Picton Mahoney
Can any of the company-specific risk be diversified away by investing in both Citigroup and Picton Mahoney 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 Picton Mahoney into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Picton Mahoney Fortified, you can compare the effects of market volatilities on Citigroup and Picton Mahoney 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 Picton Mahoney. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Picton Mahoney.
Diversification Opportunities for Citigroup and Picton Mahoney
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Citigroup and Picton is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Picton Mahoney Fortified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Picton Mahoney Fortified 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 Picton Mahoney. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Picton Mahoney Fortified has no effect on the direction of Citigroup i.e., Citigroup and Picton Mahoney go up and down completely randomly.
Pair Corralation between Citigroup and Picton Mahoney
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.0 times more return on investment than Picton Mahoney. However, Citigroup is 2.0 times more volatile than Picton Mahoney Fortified. It trades about 0.26 of its potential returns per unit of risk. Picton Mahoney Fortified is currently generating about 0.3 per unit of risk. If you would invest 6,361 in Citigroup on September 1, 2024 and sell it today you would earn a total of 726.00 from holding Citigroup or generate 11.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 91.3% |
| Values | Daily Returns |
Citigroup vs. Picton Mahoney Fortified
Performance |
| Timeline |
| Citigroup |
| Picton Mahoney Fortified |
Citigroup and Picton Mahoney Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Picton Mahoney
The main advantage of trading using opposite Citigroup and Picton Mahoney positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Picton Mahoney 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 Picton Mahoney will offset losses from the drop in Picton Mahoney's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Picton Mahoney vs. Brompton Global Dividend | Picton Mahoney vs. Global Healthcare Income | Picton Mahoney vs. Tech Leaders Income | Picton Mahoney vs. Brompton North American |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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