Correlation Between Citigroup and Purpose Conservative
Can any of the company-specific risk be diversified away by investing in both Citigroup and Purpose Conservative 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 Purpose Conservative into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Purpose Conservative Income, you can compare the effects of market volatilities on Citigroup and Purpose Conservative 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 Purpose Conservative. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Purpose Conservative.
Diversification Opportunities for Citigroup and Purpose Conservative
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Citigroup and Purpose is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Purpose Conservative Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Purpose Conservative 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 Purpose Conservative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Purpose Conservative has no effect on the direction of Citigroup i.e., Citigroup and Purpose Conservative go up and down completely randomly.
Pair Corralation between Citigroup and Purpose Conservative
Taking into account the 90-day investment horizon Citigroup is expected to generate 7.43 times more return on investment than Purpose Conservative. However, Citigroup is 7.43 times more volatile than Purpose Conservative Income. It trades about 0.21 of its potential returns per unit of risk. Purpose Conservative Income is currently generating about 0.18 per unit of risk. If you would invest 6,360 in Citigroup on August 29, 2024 and sell it today you would earn a total of 615.00 from holding Citigroup or generate 9.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Citigroup vs. Purpose Conservative Income
Performance |
| Timeline |
| Citigroup |
| Purpose Conservative |
Citigroup and Purpose Conservative Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Purpose Conservative
The main advantage of trading using opposite Citigroup and Purpose Conservative positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Purpose Conservative 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 Purpose Conservative will offset losses from the drop in Purpose Conservative'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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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