Correlation Between Citigroup and PIMCO Short
Can any of the company-specific risk be diversified away by investing in both Citigroup and PIMCO 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 PIMCO Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and PIMCO Short Term High, you can compare the effects of market volatilities on Citigroup and PIMCO 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 PIMCO Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and PIMCO Short.
Diversification Opportunities for Citigroup and PIMCO Short
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Citigroup and PIMCO is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and PIMCO Short Term High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO 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 PIMCO Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO Short Term has no effect on the direction of Citigroup i.e., Citigroup and PIMCO Short go up and down completely randomly.
Pair Corralation between Citigroup and PIMCO Short
Taking into account the 90-day investment horizon Citigroup is expected to generate 5.35 times more return on investment than PIMCO Short. However, Citigroup is 5.35 times more volatile than PIMCO Short Term High. It trades about 0.22 of its potential returns per unit of risk. PIMCO Short Term High is currently generating about 0.07 per unit of risk. If you would invest 6,360 in Citigroup on August 29, 2024 and sell it today you would earn a total of 656.00 from holding Citigroup or generate 10.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 86.96% |
| Values | Daily Returns |
Citigroup vs. PIMCO Short Term High
Performance |
| Timeline |
| Citigroup |
| PIMCO Short Term |
Citigroup and PIMCO Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and PIMCO Short
The main advantage of trading using opposite Citigroup and PIMCO Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, PIMCO 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 PIMCO Short will offset losses from the drop in PIMCO Short's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| PIMCO Short vs. UBSFund Solutions MSCI | PIMCO Short vs. iShares Core SP | PIMCO Short vs. iShares Core MSCI | PIMCO Short vs. Baloise Holding AG |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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