Correlation Between Citigroup and Steward Large
Can any of the company-specific risk be diversified away by investing in both Citigroup and Steward Large 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 Steward Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Steward Large Cap, you can compare the effects of market volatilities on Citigroup and Steward Large 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 Steward Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Steward Large.
Diversification Opportunities for Citigroup and Steward Large
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Steward is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Steward Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steward Large 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 Steward Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steward Large Cap has no effect on the direction of Citigroup i.e., Citigroup and Steward Large go up and down completely randomly.
Pair Corralation between Citigroup and Steward Large
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.11 times more return on investment than Steward Large. However, Citigroup is 2.11 times more volatile than Steward Large Cap. It trades about 0.06 of its potential returns per unit of risk. Steward Large Cap is currently generating about 0.11 per unit of risk. If you would invest 4,651 in Citigroup on September 1, 2024 and sell it today you would earn a total of 2,436 from holding Citigroup or generate 52.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.78% |
| Values | Daily Returns |
Citigroup vs. Steward Large Cap
Performance |
| Timeline |
| Citigroup |
| Steward Large Cap |
Citigroup and Steward Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Steward Large
The main advantage of trading using opposite Citigroup and Steward Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Steward Large 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 Steward Large will offset losses from the drop in Steward Large's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Steward Large vs. Steward Small Mid Cap | Steward Large vs. Steward Global E | Steward Large vs. Buffalo Large Cap | Steward Large vs. Steward Select Bond |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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