Correlation Between Citigroup and Pimco International
Can any of the company-specific risk be diversified away by investing in both Citigroup and Pimco 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 Pimco International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Pimco International Stocksplus, you can compare the effects of market volatilities on Citigroup and Pimco 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 Pimco International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Pimco International.
Diversification Opportunities for Citigroup and Pimco International
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Citigroup and Pimco is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Pimco International Stocksplus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco 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 Pimco International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco International has no effect on the direction of Citigroup i.e., Citigroup and Pimco International go up and down completely randomly.
Pair Corralation between Citigroup and Pimco International
Taking into account the 90-day investment horizon Citigroup is expected to generate 3.6 times more return on investment than Pimco International. However, Citigroup is 3.6 times more volatile than Pimco International Stocksplus. It trades about 0.26 of its potential returns per unit of risk. Pimco International Stocksplus 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 | 95.45% |
| Values | Daily Returns |
Citigroup vs. Pimco International Stocksplus
Performance |
| Timeline |
| Citigroup |
| Pimco International |
Citigroup and Pimco International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Pimco International
The main advantage of trading using opposite Citigroup and Pimco International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Pimco 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 Pimco International will offset losses from the drop in Pimco International's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Pimco International vs. Pimco Rae Worldwide | Pimco International vs. Pimco Rae Worldwide | Pimco International vs. Pimco Rae Worldwide | Pimco International vs. Pimco Rae Worldwide |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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