Correlation Between Citigroup and Pax Core
Can any of the company-specific risk be diversified away by investing in both Citigroup and Pax Core 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 Pax Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Pax E Bond, you can compare the effects of market volatilities on Citigroup and Pax Core 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 Pax Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Pax Core.
Diversification Opportunities for Citigroup and Pax Core
Very good diversification
The 3 months correlation between Citigroup and Pax is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Pax E Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pax E Bond 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 Pax Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pax E Bond has no effect on the direction of Citigroup i.e., Citigroup and Pax Core go up and down completely randomly.
Pair Corralation between Citigroup and Pax Core
Taking into account the 90-day investment horizon Citigroup is expected to generate 4.8 times more return on investment than Pax Core. However, Citigroup is 4.8 times more volatile than Pax E Bond. It trades about 0.04 of its potential returns per unit of risk. Pax E Bond is currently generating about 0.03 per unit of risk. If you would invest 4,532 in Citigroup on January 12, 2025 and sell it today you would earn a total of 1,627 from holding Citigroup or generate 35.9% 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. Pax E Bond
Performance |
| Timeline |
| Citigroup |
| Pax E Bond |
Citigroup and Pax Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Pax Core
The main advantage of trading using opposite Citigroup and Pax Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Pax Core 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 Pax Core will offset losses from the drop in Pax Core's long position.| Citigroup vs. Barclays PLC ADR | Citigroup vs. ING Group NV | Citigroup vs. Banco Santander SA | Citigroup vs. HSBC Holdings PLC |
| Pax Core vs. Pax Global Environmental | Pax Core vs. Pax Esg Beta | Pax Core vs. Pax Global Opportunities | Pax Core vs. Pax High Yield |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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