Correlation Between Citigroup and Clearbridge Small
Can any of the company-specific risk be diversified away by investing in both Citigroup and Clearbridge Small 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 Clearbridge Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Clearbridge Small Cap, you can compare the effects of market volatilities on Citigroup and Clearbridge Small 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 Clearbridge Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Clearbridge Small.
Diversification Opportunities for Citigroup and Clearbridge Small
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Citigroup and Clearbridge is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Clearbridge Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Small Cap 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 Clearbridge Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Small Cap has no effect on the direction of Citigroup i.e., Citigroup and Clearbridge Small go up and down completely randomly.
Pair Corralation between Citigroup and Clearbridge Small
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.45 times more return on investment than Clearbridge Small. However, Citigroup is 1.45 times more volatile than Clearbridge Small Cap. It trades about 0.07 of its potential returns per unit of risk. Clearbridge Small Cap is currently generating about 0.1 per unit of risk. If you would invest 6,079 in Citigroup on September 1, 2024 and sell it today you would earn a total of 1,008 from holding Citigroup or generate 16.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Clearbridge Small Cap
Performance |
| Timeline |
| Citigroup |
| Clearbridge Small Cap |
Citigroup and Clearbridge Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Clearbridge Small
The main advantage of trading using opposite Citigroup and Clearbridge Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Clearbridge Small 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 Clearbridge Small will offset losses from the drop in Clearbridge Small's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Clearbridge Small vs. Pimco Funds | Clearbridge Small vs. Ashmore Emerging Markets | Clearbridge Small vs. John Hancock Money | Clearbridge Small vs. Transamerica Funds |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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