Correlation Between Citigroup and CI Canadian
Can any of the company-specific risk be diversified away by investing in both Citigroup and CI Canadian 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 CI Canadian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and CI Canadian REIT, you can compare the effects of market volatilities on Citigroup and CI Canadian 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 CI Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and CI Canadian.
Diversification Opportunities for Citigroup and CI Canadian
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and RIT is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and CI Canadian REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Canadian REIT 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 CI Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Canadian REIT has no effect on the direction of Citigroup i.e., Citigroup and CI Canadian go up and down completely randomly.
Pair Corralation between Citigroup and CI Canadian
Taking into account the 90-day investment horizon Citigroup is expected to generate 3.88 times more return on investment than CI Canadian. However, Citigroup is 3.88 times more volatile than CI Canadian REIT. It trades about 0.21 of its potential returns per unit of risk. CI Canadian REIT is currently generating about -0.36 per unit of risk. If you would invest 6,255 in Citigroup on August 24, 2024 and sell it today you would earn a total of 640.00 from holding Citigroup or generate 10.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. CI Canadian REIT
Performance |
| Timeline |
| Citigroup |
| CI Canadian REIT |
Citigroup and CI Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and CI Canadian
The main advantage of trading using opposite Citigroup and CI Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, CI Canadian 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 CI Canadian will offset losses from the drop in CI Canadian's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| CI Canadian vs. BMO Equal Weight | CI Canadian vs. Vanguard FTSE Canadian | CI Canadian vs. iShares SPTSX Capped | CI Canadian vs. BMO Equal Weight |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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