Correlation Between Citigroup and Seix Govt
Can any of the company-specific risk be diversified away by investing in both Citigroup and Seix Govt 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 Seix Govt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Seix Govt Sec, you can compare the effects of market volatilities on Citigroup and Seix Govt 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 Seix Govt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Seix Govt.
Diversification Opportunities for Citigroup and Seix Govt
Weak diversification
The 3 months correlation between Citigroup and Seix is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Seix Govt Sec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seix Govt Sec 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 Seix Govt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seix Govt Sec has no effect on the direction of Citigroup i.e., Citigroup and Seix Govt go up and down completely randomly.
Pair Corralation between Citigroup and Seix Govt
Taking into account the 90-day investment horizon Citigroup is expected to generate 9.44 times more return on investment than Seix Govt. However, Citigroup is 9.44 times more volatile than Seix Govt Sec. It trades about 0.07 of its potential returns per unit of risk. Seix Govt Sec is currently generating about 0.13 per unit of risk. If you would invest 4,733 in Citigroup on October 26, 2024 and sell it today you would earn a total of 3,415 from holding Citigroup or generate 72.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Seix Govt Sec
Performance |
| Timeline |
| Citigroup |
| Seix Govt Sec |
Citigroup and Seix Govt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Seix Govt
The main advantage of trading using opposite Citigroup and Seix Govt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Seix Govt 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 Seix Govt will offset losses from the drop in Seix Govt's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Seix Govt vs. Blackrock Global Longshort | Seix Govt vs. Jhancock Short Duration | Seix Govt vs. Vela Short Duration | Seix Govt vs. Federated Government Ultrashort |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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