Correlation Between Citigroup and PowerShares Dynamic
Can any of the company-specific risk be diversified away by investing in both Citigroup and PowerShares Dynamic 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 PowerShares Dynamic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and PowerShares Dynamic Hardware, you can compare the effects of market volatilities on Citigroup and PowerShares Dynamic 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 PowerShares Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and PowerShares Dynamic.
Diversification Opportunities for Citigroup and PowerShares Dynamic
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and PowerShares is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and PowerShares Dynamic Hardware in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PowerShares Dynamic 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 PowerShares Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PowerShares Dynamic has no effect on the direction of Citigroup i.e., Citigroup and PowerShares Dynamic go up and down completely randomly.
Pair Corralation between Citigroup and PowerShares Dynamic
If you would invest 6,842 in Citigroup on October 20, 2024 and sell it today you would earn a total of 1,157 from holding Citigroup or generate 16.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Citigroup vs. PowerShares Dynamic Hardware
Performance |
| Timeline |
| Citigroup |
| PowerShares Dynamic |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Citigroup and PowerShares Dynamic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and PowerShares Dynamic
The main advantage of trading using opposite Citigroup and PowerShares Dynamic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, PowerShares Dynamic 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 PowerShares Dynamic will offset losses from the drop in PowerShares Dynamic's long position.| Citigroup vs. Bank of Montreal | Citigroup vs. Canadian Imperial Bank | Citigroup vs. Bank of Nova | Citigroup vs. JPMorgan Chase Co |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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