Correlation Between Citigroup and Pacer Funds
Can any of the company-specific risk be diversified away by investing in both Citigroup and Pacer Funds 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 Pacer Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Pacer Funds Trust, you can compare the effects of market volatilities on Citigroup and Pacer Funds 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 Pacer Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Pacer Funds.
Diversification Opportunities for Citigroup and Pacer Funds
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Citigroup and Pacer is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Pacer Funds Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Funds Trust 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 Pacer Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Funds Trust has no effect on the direction of Citigroup i.e., Citigroup and Pacer Funds go up and down completely randomly.
Pair Corralation between Citigroup and Pacer Funds
Taking into account the 90-day investment horizon Citigroup is expected to generate 3.5 times more return on investment than Pacer Funds. However, Citigroup is 3.5 times more volatile than Pacer Funds Trust. It trades about 0.07 of its potential returns per unit of risk. Pacer Funds Trust is currently generating about 0.12 per unit of risk. If you would invest 4,293 in Citigroup on September 3, 2024 and sell it today you would earn a total of 2,846 from holding Citigroup or generate 66.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Pacer Funds Trust
Performance |
| Timeline |
| Citigroup |
| Pacer Funds Trust |
Citigroup and Pacer Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Pacer Funds
The main advantage of trading using opposite Citigroup and Pacer Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Pacer Funds 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 Pacer Funds will offset losses from the drop in Pacer Funds' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Pacer Funds vs. Innovator ETFs Trust | Pacer Funds vs. First Trust Cboe | Pacer Funds vs. FT Cboe Vest | Pacer Funds vs. Innovator SP 500 |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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