Correlation Between Citigroup and Guggenheim Investment
Can any of the company-specific risk be diversified away by investing in both Citigroup and Guggenheim Investment 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 Guggenheim Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Guggenheim Investment Grade, you can compare the effects of market volatilities on Citigroup and Guggenheim Investment 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 Guggenheim Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Guggenheim Investment.
Diversification Opportunities for Citigroup and Guggenheim Investment
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Citigroup and Guggenheim is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Guggenheim Investment Grade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Investment 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 Guggenheim Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Investment has no effect on the direction of Citigroup i.e., Citigroup and Guggenheim Investment go up and down completely randomly.
Pair Corralation between Citigroup and Guggenheim Investment
Taking into account the 90-day investment horizon Citigroup is expected to under-perform the Guggenheim Investment. In addition to that, Citigroup is 5.7 times more volatile than Guggenheim Investment Grade. It trades about -0.02 of its total potential returns per unit of risk. Guggenheim Investment Grade is currently generating about 0.19 per unit of volatility. If you would invest 1,601 in Guggenheim Investment Grade on November 27, 2024 and sell it today you would earn a total of 18.00 from holding Guggenheim Investment Grade or generate 1.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Guggenheim Investment Grade
Performance |
| Timeline |
| Citigroup |
| Guggenheim Investment |
Citigroup and Guggenheim Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Guggenheim Investment
The main advantage of trading using opposite Citigroup and Guggenheim Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Guggenheim Investment 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 Guggenheim Investment will offset losses from the drop in Guggenheim Investment's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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