Correlation Between Citigroup and Columbia Select
Can any of the company-specific risk be diversified away by investing in both Citigroup and Columbia Select 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 Columbia Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Columbia Select Smaller Cap, you can compare the effects of market volatilities on Citigroup and Columbia Select 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 Columbia Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Columbia Select.
Diversification Opportunities for Citigroup and Columbia Select
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Citigroup and Columbia is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Columbia Select Smaller Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Select Smaller 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 Columbia Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Select Smaller has no effect on the direction of Citigroup i.e., Citigroup and Columbia Select go up and down completely randomly.
Pair Corralation between Citigroup and Columbia Select
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.35 times more return on investment than Columbia Select. However, Citigroup is 1.35 times more volatile than Columbia Select Smaller Cap. It trades about 0.21 of its potential returns per unit of risk. Columbia Select Smaller Cap is currently generating about 0.26 per unit of risk. If you would invest 6,393 in Citigroup on August 31, 2024 and sell it today you would earn a total of 623.00 from holding Citigroup or generate 9.75% 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. Columbia Select Smaller Cap
Performance |
| Timeline |
| Citigroup |
| Columbia Select Smaller |
Citigroup and Columbia Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Columbia Select
The main advantage of trading using opposite Citigroup and Columbia Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Columbia Select 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 Columbia Select will offset losses from the drop in Columbia Select's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Columbia Select vs. Chase Growth Fund | Columbia Select vs. Artisan Small Cap | Columbia Select vs. Small Midcap Dividend Income | Columbia Select vs. Kinetics 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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