Correlation Between Citigroup and Payden Emerging
Can any of the company-specific risk be diversified away by investing in both Citigroup and Payden Emerging 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 Payden Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Payden Emerging Markets, you can compare the effects of market volatilities on Citigroup and Payden Emerging 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 Payden Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Payden Emerging.
Diversification Opportunities for Citigroup and Payden Emerging
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citigroup and Payden is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Payden Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden Emerging Markets 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 Payden Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden Emerging Markets has no effect on the direction of Citigroup i.e., Citigroup and Payden Emerging go up and down completely randomly.
Pair Corralation between Citigroup and Payden Emerging
Taking into account the 90-day investment horizon Citigroup is expected to generate 16.45 times more return on investment than Payden Emerging. However, Citigroup is 16.45 times more volatile than Payden Emerging Markets. It trades about 0.21 of its potential returns per unit of risk. Payden Emerging Markets is currently generating about 0.13 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 | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Citigroup vs. Payden Emerging Markets
Performance |
| Timeline |
| Citigroup |
| Payden Emerging Markets |
Citigroup and Payden Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Payden Emerging
The main advantage of trading using opposite Citigroup and Payden Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Payden Emerging 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 Payden Emerging will offset losses from the drop in Payden Emerging's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Payden Emerging vs. Artisan Emerging Markets | Payden Emerging vs. Legg Mason Partners | Payden Emerging vs. T Rowe Price | Payden Emerging vs. Ab Bond Inflation |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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