Correlation Between Citigroup and Principal International
Can any of the company-specific risk be diversified away by investing in both Citigroup and Principal International 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 International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Principal International Equity, you can compare the effects of market volatilities on Citigroup and Principal International 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 International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Principal International.
Diversification Opportunities for Citigroup and Principal International
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Citigroup and Principal is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Principal International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Principal International 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 International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Principal International has no effect on the direction of Citigroup i.e., Citigroup and Principal International go up and down completely randomly.
Pair Corralation between Citigroup and Principal International
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.56 times more return on investment than Principal International. However, Citigroup is 2.56 times more volatile than Principal International Equity. It trades about 0.26 of its potential returns per unit of risk. Principal International Equity is currently generating about -0.11 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 | Insignificant |
| Accuracy | 85.71% |
| Values | Daily Returns |
Citigroup vs. Principal International Equity
Performance |
| Timeline |
| Citigroup |
| Principal International |
Citigroup and Principal International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Principal International
The main advantage of trading using opposite Citigroup and Principal International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Principal International 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 International will offset losses from the drop in Principal International's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Principal International vs. Vanguard Total Stock | Principal International vs. SPDR SP 500 | Principal International vs. iShares Core SP | Principal International vs. Vanguard Total Bond |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |