Correlation Between Citigroup and Stralem Equity
Can any of the company-specific risk be diversified away by investing in both Citigroup and Stralem Equity 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 Stralem Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Stralem Equity Fund, you can compare the effects of market volatilities on Citigroup and Stralem Equity 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 Stralem Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Stralem Equity.
Diversification Opportunities for Citigroup and Stralem Equity
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Citigroup and Stralem is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Stralem Equity Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stralem Equity 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 Stralem Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stralem Equity has no effect on the direction of Citigroup i.e., Citigroup and Stralem Equity go up and down completely randomly.
Pair Corralation between Citigroup and Stralem Equity
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.05 times more return on investment than Stralem Equity. However, Citigroup is 2.05 times more volatile than Stralem Equity Fund. It trades about 0.07 of its potential returns per unit of risk. Stralem Equity Fund is currently generating about 0.1 per unit of risk. If you would invest 4,328 in Citigroup on August 26, 2024 and sell it today you would earn a total of 2,656 from holding Citigroup or generate 61.37% 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. Stralem Equity Fund
Performance |
| Timeline |
| Citigroup |
| Stralem Equity |
Citigroup and Stralem Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Stralem Equity
The main advantage of trading using opposite Citigroup and Stralem Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Stralem Equity 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 Stralem Equity will offset losses from the drop in Stralem Equity's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| Stralem Equity vs. Sterling Capital Equity | Stralem Equity vs. Sterling Capital Behavioral | Stralem Equity vs. Sterling Capital Behavioral | Stralem Equity vs. Sterling Capital Behavioral |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |