Correlation Between Citigroup and Sit Dividend
Can any of the company-specific risk be diversified away by investing in both Citigroup and Sit Dividend 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 Sit Dividend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Sit Dividend Growth, you can compare the effects of market volatilities on Citigroup and Sit Dividend 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 Sit Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Sit Dividend.
Diversification Opportunities for Citigroup and Sit Dividend
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Sit is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Sit Dividend Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit Dividend Growth 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 Sit Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit Dividend Growth has no effect on the direction of Citigroup i.e., Citigroup and Sit Dividend go up and down completely randomly.
Pair Corralation between Citigroup and Sit Dividend
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.38 times more return on investment than Sit Dividend. However, Citigroup is 2.38 times more volatile than Sit Dividend Growth. It trades about 0.08 of its potential returns per unit of risk. Sit Dividend Growth is currently generating about 0.12 per unit of risk. If you would invest 4,362 in Citigroup on August 30, 2024 and sell it today you would earn a total of 2,654 from holding Citigroup or generate 60.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Sit Dividend Growth
Performance |
| Timeline |
| Citigroup |
| Sit Dividend Growth |
Citigroup and Sit Dividend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Sit Dividend
The main advantage of trading using opposite Citigroup and Sit Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Sit Dividend 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 Sit Dividend will offset losses from the drop in Sit Dividend's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Sit Dividend vs. Vanguard Total Stock | Sit Dividend vs. Vanguard 500 Index | Sit Dividend vs. Vanguard Total Stock | Sit Dividend vs. Vanguard Total Stock |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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