Correlation Between Citigroup and Putnam Msschustts
Can any of the company-specific risk be diversified away by investing in both Citigroup and Putnam Msschustts 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 Putnam Msschustts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Putnam Msschustts Tx, you can compare the effects of market volatilities on Citigroup and Putnam Msschustts 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 Putnam Msschustts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Putnam Msschustts.
Diversification Opportunities for Citigroup and Putnam Msschustts
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Putnam is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Putnam Msschustts Tx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Msschustts 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 Putnam Msschustts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Msschustts has no effect on the direction of Citigroup i.e., Citigroup and Putnam Msschustts go up and down completely randomly.
Pair Corralation between Citigroup and Putnam Msschustts
Taking into account the 90-day investment horizon Citigroup is expected to generate 8.76 times more return on investment than Putnam Msschustts. However, Citigroup is 8.76 times more volatile than Putnam Msschustts Tx. It trades about 0.08 of its potential returns per unit of risk. Putnam Msschustts Tx is currently generating about 0.11 per unit of risk. If you would invest 6,064 in Citigroup on September 3, 2024 and sell it today you would earn a total of 1,075 from holding Citigroup or generate 17.73% 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. Putnam Msschustts Tx
Performance |
| Timeline |
| Citigroup |
| Putnam Msschustts |
Citigroup and Putnam Msschustts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Putnam Msschustts
The main advantage of trading using opposite Citigroup and Putnam Msschustts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Putnam Msschustts 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 Putnam Msschustts will offset losses from the drop in Putnam Msschustts' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Putnam Msschustts vs. Goldman Sachs Short | Putnam Msschustts vs. Touchstone Ultra Short | Putnam Msschustts vs. Siit Ultra Short | Putnam Msschustts vs. Old Westbury Short Term |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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