Correlation Between Citigroup and George Putnam
Can any of the company-specific risk be diversified away by investing in both Citigroup and George Putnam 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 George Putnam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and George Putnam Balanced, you can compare the effects of market volatilities on Citigroup and George Putnam 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 George Putnam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and George Putnam.
Diversification Opportunities for Citigroup and George Putnam
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and George is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and George Putnam Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on George Putnam Balanced 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 George Putnam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of George Putnam Balanced has no effect on the direction of Citigroup i.e., Citigroup and George Putnam go up and down completely randomly.
Pair Corralation between Citigroup and George Putnam
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.27 times more return on investment than George Putnam. However, Citigroup is 2.27 times more volatile than George Putnam Balanced. It trades about 0.23 of its potential returns per unit of risk. George Putnam Balanced is currently generating about -0.06 per unit of risk. If you would invest 6,393 in Citigroup on August 31, 2024 and sell it today you would earn a total of 694.00 from holding Citigroup or generate 10.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Citigroup vs. George Putnam Balanced
Performance |
| Timeline |
| Citigroup |
| George Putnam Balanced |
Citigroup and George Putnam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and George Putnam
The main advantage of trading using opposite Citigroup and George Putnam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, George Putnam 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 George Putnam will offset losses from the drop in George Putnam's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| George Putnam vs. American Funds American | George Putnam vs. American Funds American | George Putnam vs. American Balanced | George Putnam vs. American Balanced Fund |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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