Correlation Between Citigroup and Principal Real
Can any of the company-specific risk be diversified away by investing in both Citigroup and Principal Real 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 Principal Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Principal Real Estate, you can compare the effects of market volatilities on Citigroup and Principal Real 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 Principal Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Principal Real.
Diversification Opportunities for Citigroup and Principal Real
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Citigroup and Principal is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Principal Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Principal Real Estate 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 Principal Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Principal Real Estate has no effect on the direction of Citigroup i.e., Citigroup and Principal Real go up and down completely randomly.
Pair Corralation between Citigroup and Principal Real
Taking into account the 90-day investment horizon Citigroup is expected to under-perform the Principal Real. In addition to that, Citigroup is 3.18 times more volatile than Principal Real Estate. It trades about -0.12 of its total potential returns per unit of risk. Principal Real Estate is currently generating about 0.38 per unit of volatility. If you would invest 1,009 in Principal Real Estate on November 27, 2024 and sell it today you would earn a total of 45.00 from holding Principal Real Estate or generate 4.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Principal Real Estate
Performance |
| Timeline |
| Citigroup |
| Principal Real Estate |
Citigroup and Principal Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Principal Real
The main advantage of trading using opposite Citigroup and Principal Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Principal Real 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 Principal Real will offset losses from the drop in Principal Real's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Principal Real vs. Eaton Vance National | Principal Real vs. Blackrock Muniholdings Ny | Principal Real vs. Nuveen California Select | Principal Real vs. Invesco Van Kampen |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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