Correlation Between Citigroup and Salient Mlp
Can any of the company-specific risk be diversified away by investing in both Citigroup and Salient Mlp 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 Salient Mlp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Salient Mlp Energy, you can compare the effects of market volatilities on Citigroup and Salient Mlp 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 Salient Mlp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Salient Mlp.
Diversification Opportunities for Citigroup and Salient Mlp
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Citigroup and Salient is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Salient Mlp Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salient Mlp Energy 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 Salient Mlp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salient Mlp Energy has no effect on the direction of Citigroup i.e., Citigroup and Salient Mlp go up and down completely randomly.
Pair Corralation between Citigroup and Salient Mlp
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.12 times more return on investment than Salient Mlp. However, Citigroup is 2.12 times more volatile than Salient Mlp Energy. It trades about 0.12 of its potential returns per unit of risk. Salient Mlp Energy is currently generating about 0.19 per unit of risk. If you would invest 4,445 in Citigroup on August 26, 2024 and sell it today you would earn a total of 2,539 from holding Citigroup or generate 57.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Salient Mlp Energy
Performance |
| Timeline |
| Citigroup |
| Salient Mlp Energy |
Citigroup and Salient Mlp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Salient Mlp
The main advantage of trading using opposite Citigroup and Salient Mlp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Salient Mlp 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 Salient Mlp will offset losses from the drop in Salient Mlp's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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