Correlation Between Citigroup and Real Estate
Can any of the company-specific risk be diversified away by investing in both Citigroup and Real Estate 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 Real Estate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Real Estate Ultrasector, you can compare the effects of market volatilities on Citigroup and Real Estate 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 Real Estate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Real Estate.
Diversification Opportunities for Citigroup and Real Estate
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and Real is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Real Estate Ultrasector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Real Estate Ultrasector 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 Real Estate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Real Estate Ultrasector has no effect on the direction of Citigroup i.e., Citigroup and Real Estate go up and down completely randomly.
Pair Corralation between Citigroup and Real Estate
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.28 times more return on investment than Real Estate. However, Citigroup is 1.28 times more volatile than Real Estate Ultrasector. It trades about 0.29 of its potential returns per unit of risk. Real Estate Ultrasector is currently generating about -0.04 per unit of risk. If you would invest 6,122 in Citigroup on August 26, 2024 and sell it today you would earn a total of 862.00 from holding Citigroup or generate 14.08% 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. Real Estate Ultrasector
Performance |
| Timeline |
| Citigroup |
| Real Estate Ultrasector |
Citigroup and Real Estate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Real Estate
The main advantage of trading using opposite Citigroup and Real Estate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Real Estate 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 Real Estate will offset losses from the drop in Real Estate's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| Real Estate vs. Pender Real Estate | Real Estate vs. Guggenheim Risk Managed | Real Estate vs. Virtus Real Estate | Real Estate vs. Dunham Real Estate |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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