Correlation Between Citigroup and First Eagle
Can any of the company-specific risk be diversified away by investing in both Citigroup and First Eagle 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 First Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and First Eagle Overseas, you can compare the effects of market volatilities on Citigroup and First Eagle 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 First Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and First Eagle.
Diversification Opportunities for Citigroup and First Eagle
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and First is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and First Eagle Overseas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Eagle Overseas 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 First Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Eagle Overseas has no effect on the direction of Citigroup i.e., Citigroup and First Eagle go up and down completely randomly.
Pair Corralation between Citigroup and First Eagle
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.43 times more return on investment than First Eagle. However, Citigroup is 2.43 times more volatile than First Eagle Overseas. It trades about 0.1 of its potential returns per unit of risk. First Eagle Overseas is currently generating about 0.06 per unit of risk. If you would invest 4,357 in Citigroup on August 26, 2024 and sell it today you would earn a total of 2,627 from holding Citigroup or generate 60.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. First Eagle Overseas
Performance |
| Timeline |
| Citigroup |
| First Eagle Overseas |
Citigroup and First Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and First Eagle
The main advantage of trading using opposite Citigroup and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, First Eagle 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 First Eagle will offset losses from the drop in First Eagle's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| First Eagle vs. First Eagle Global | First Eagle vs. Oppenheimer Developing Markets | First Eagle vs. Delaware Value Fund | First Eagle vs. Small Cap Value |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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