Correlation Between Citigroup and Prudential Short-term
Can any of the company-specific risk be diversified away by investing in both Citigroup and Prudential Short-term 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 Prudential Short-term into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Prudential Short Term Porate, you can compare the effects of market volatilities on Citigroup and Prudential Short-term 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 Prudential Short-term. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Prudential Short-term.
Diversification Opportunities for Citigroup and Prudential Short-term
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Prudential is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Prudential Short Term Porate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Short Term 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 Prudential Short-term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Short Term has no effect on the direction of Citigroup i.e., Citigroup and Prudential Short-term go up and down completely randomly.
Pair Corralation between Citigroup and Prudential Short-term
Taking into account the 90-day investment horizon Citigroup is expected to generate 17.75 times more return on investment than Prudential Short-term. However, Citigroup is 17.75 times more volatile than Prudential Short Term Porate. It trades about 0.23 of its potential returns per unit of risk. Prudential Short Term Porate is currently generating about -0.03 per unit of risk. If you would invest 6,245 in Citigroup on August 25, 2024 and sell it today you would earn a total of 739.00 from holding Citigroup or generate 11.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Prudential Short Term Porate
Performance |
| Timeline |
| Citigroup |
| Prudential Short Term |
Citigroup and Prudential Short-term Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Prudential Short-term
The main advantage of trading using opposite Citigroup and Prudential Short-term positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Prudential Short-term 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 Prudential Short-term will offset losses from the drop in Prudential Short-term's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |