Correlation Between Citigroup and Echelon Prime
Can any of the company-specific risk be diversified away by investing in both Citigroup and Echelon Prime 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 Echelon Prime into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Echelon Prime, you can compare the effects of market volatilities on Citigroup and Echelon Prime 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 Echelon Prime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Echelon Prime.
Diversification Opportunities for Citigroup and Echelon Prime
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Citigroup and Echelon is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Echelon Prime in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Echelon Prime 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 Echelon Prime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Echelon Prime has no effect on the direction of Citigroup i.e., Citigroup and Echelon Prime go up and down completely randomly.
Pair Corralation between Citigroup and Echelon Prime
Taking into account the 90-day investment horizon Citigroup is expected to generate 4.96 times less return on investment than Echelon Prime. But when comparing it to its historical volatility, Citigroup is 4.62 times less risky than Echelon Prime. It trades about 0.12 of its potential returns per unit of risk. Echelon Prime is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 689.00 in Echelon Prime on August 31, 2024 and sell it today you would earn a total of 484.00 from holding Echelon Prime or generate 70.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Citigroup vs. Echelon Prime
Performance |
| Timeline |
| Citigroup |
| Echelon Prime |
Citigroup and Echelon Prime Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Echelon Prime
The main advantage of trading using opposite Citigroup and Echelon Prime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Echelon Prime 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 Echelon Prime will offset losses from the drop in Echelon Prime's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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