Correlation Between Citigroup and Stet Intermediate
Can any of the company-specific risk be diversified away by investing in both Citigroup and Stet Intermediate 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 Stet Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Stet Intermediate Term, you can compare the effects of market volatilities on Citigroup and Stet Intermediate 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 Stet Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Stet Intermediate.
Diversification Opportunities for Citigroup and Stet Intermediate
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Stet is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Stet Intermediate Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stet Intermediate Term 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 Stet Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stet Intermediate Term has no effect on the direction of Citigroup i.e., Citigroup and Stet Intermediate go up and down completely randomly.
Pair Corralation between Citigroup and Stet Intermediate
Taking into account the 90-day investment horizon Citigroup is expected to generate 10.43 times more return on investment than Stet Intermediate. However, Citigroup is 10.43 times more volatile than Stet Intermediate Term. It trades about 0.07 of its potential returns per unit of risk. Stet Intermediate Term is currently generating about 0.14 per unit of risk. If you would invest 6,079 in Citigroup on September 1, 2024 and sell it today you would earn a total of 1,008 from holding Citigroup or generate 16.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Citigroup vs. Stet Intermediate Term
Performance |
| Timeline |
| Citigroup |
| Stet Intermediate Term |
Citigroup and Stet Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Stet Intermediate
The main advantage of trading using opposite Citigroup and Stet Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Stet Intermediate 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 Stet Intermediate will offset losses from the drop in Stet Intermediate's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Stet Intermediate vs. Simt Multi Asset Accumulation | Stet Intermediate vs. Saat Market Growth | Stet Intermediate vs. Simt Real Return | Stet Intermediate vs. Simt Small Cap |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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