Correlation Between Citigroup and Invesco Physical
Can any of the company-specific risk be diversified away by investing in both Citigroup and Invesco Physical 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 Invesco Physical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Invesco Physical Gold, you can compare the effects of market volatilities on Citigroup and Invesco Physical 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 Invesco Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Invesco Physical.
Diversification Opportunities for Citigroup and Invesco Physical
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citigroup and Invesco is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Invesco Physical Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Physical Gold 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 Invesco Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Physical Gold has no effect on the direction of Citigroup i.e., Citigroup and Invesco Physical go up and down completely randomly.
Pair Corralation between Citigroup and Invesco Physical
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.0 times more return on investment than Invesco Physical. However, Citigroup is 2.0 times more volatile than Invesco Physical Gold. It trades about 0.09 of its potential returns per unit of risk. Invesco Physical Gold is currently generating about 0.14 per unit of risk. If you would invest 5,207 in Citigroup on September 3, 2024 and sell it today you would earn a total of 1,880 from holding Citigroup or generate 36.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.7% |
| Values | Daily Returns |
Citigroup vs. Invesco Physical Gold
Performance |
| Timeline |
| Citigroup |
| Invesco Physical Gold |
Citigroup and Invesco Physical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Invesco Physical
The main advantage of trading using opposite Citigroup and Invesco Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Invesco Physical 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 Invesco Physical will offset losses from the drop in Invesco Physical's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Invesco Physical vs. Gamma Communications PLC | Invesco Physical vs. Hochschild Mining plc | Invesco Physical vs. Greenroc Mining PLC | Invesco Physical vs. Zoom Video Communications |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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