Correlation Between Citigroup and Prudential Intl
Can any of the company-specific risk be diversified away by investing in both Citigroup and Prudential Intl 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 Prudential Intl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Prudential Intl Bond, you can compare the effects of market volatilities on Citigroup and Prudential Intl 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 Prudential Intl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Prudential Intl.
Diversification Opportunities for Citigroup and Prudential Intl
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Prudential is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Prudential Intl Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Intl 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 Prudential Intl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Intl Bond has no effect on the direction of Citigroup i.e., Citigroup and Prudential Intl go up and down completely randomly.
Pair Corralation between Citigroup and Prudential Intl
If you would invest 6,361 in Citigroup on September 1, 2024 and sell it today you would earn a total of 726.00 from holding Citigroup or generate 11.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 4.76% |
| Values | Daily Returns |
Citigroup vs. Prudential Intl Bond
Performance |
| Timeline |
| Citigroup |
| Prudential Intl Bond |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Citigroup and Prudential Intl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Prudential Intl
The main advantage of trading using opposite Citigroup and Prudential Intl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Prudential Intl 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 Prudential Intl will offset losses from the drop in Prudential Intl's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Prudential Intl vs. Prudential Select Real | Prudential Intl vs. Prudential Short Duration | Prudential Intl vs. Prudential Unconstrained Bond |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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