Correlation Between Citigroup and Pimco Rae
Can any of the company-specific risk be diversified away by investing in both Citigroup and Pimco Rae 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 Rae into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Pimco Rae Worldwide, you can compare the effects of market volatilities on Citigroup and Pimco Rae 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 Rae. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Pimco Rae.
Diversification Opportunities for Citigroup and Pimco Rae
Good diversification
The 3 months correlation between Citigroup and Pimco is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Pimco Rae Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Rae Worldwide 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 Rae. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Rae Worldwide has no effect on the direction of Citigroup i.e., Citigroup and Pimco Rae go up and down completely randomly.
Pair Corralation between Citigroup and Pimco Rae
Taking into account the 90-day investment horizon Citigroup is expected to generate 6.97 times more return on investment than Pimco Rae. However, Citigroup is 6.97 times more volatile than Pimco Rae Worldwide. It trades about 0.24 of its potential returns per unit of risk. Pimco Rae Worldwide is currently generating about -0.02 per unit of risk. If you would invest 6,245 in Citigroup on August 25, 2024 and sell it today you would earn a total of 739.00 from holding Citigroup or generate 11.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Pimco Rae Worldwide
Performance |
| Timeline |
| Citigroup |
| Pimco Rae Worldwide |
Citigroup and Pimco Rae Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Pimco Rae
The main advantage of trading using opposite Citigroup and Pimco Rae positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Pimco Rae 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 Rae will offset losses from the drop in Pimco Rae's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Pimco Rae vs. Neuberger Berman Long | Pimco Rae vs. Neuberger Berman Long | Pimco Rae vs. Neuberger Berman Long | Pimco Rae vs. Diamond Hill Long Short |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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