Correlation Between Citigroup and Invesco Short
Can any of the company-specific risk be diversified away by investing in both Citigroup and Invesco Short 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 Invesco Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Invesco Short Term, you can compare the effects of market volatilities on Citigroup and Invesco Short 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 Invesco Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Invesco Short.
Diversification Opportunities for Citigroup and Invesco Short
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Citigroup and Invesco is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Invesco Short Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Short 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 Invesco Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Short Term has no effect on the direction of Citigroup i.e., Citigroup and Invesco Short go up and down completely randomly.
Pair Corralation between Citigroup and Invesco Short
Taking into account the 90-day investment horizon Citigroup is expected to generate 18.87 times more return on investment than Invesco Short. However, Citigroup is 18.87 times more volatile than Invesco Short Term. It trades about 0.25 of its potential returns per unit of risk. Invesco Short Term is currently generating about 0.11 per unit of risk. If you would invest 6,360 in Citigroup on August 27, 2024 and sell it today you would earn a total of 715.00 from holding Citigroup or generate 11.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Invesco Short Term
Performance |
| Timeline |
| Citigroup |
| Invesco Short Term |
Citigroup and Invesco Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Invesco Short
The main advantage of trading using opposite Citigroup and Invesco Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Invesco Short 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 Invesco Short will offset losses from the drop in Invesco Short's long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
| Invesco Short vs. Invesco Municipal Income | Invesco Short vs. Invesco Municipal Income | Invesco Short vs. Invesco Municipal Income | Invesco Short vs. Oppenheimer Rising Dividends |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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