Correlation Between Citigroup and Federated Strategic
Can any of the company-specific risk be diversified away by investing in both Citigroup and Federated Strategic 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 Federated Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Federated Strategic Value, you can compare the effects of market volatilities on Citigroup and Federated Strategic 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 Federated Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Federated Strategic.
Diversification Opportunities for Citigroup and Federated Strategic
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citigroup and Federated is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Federated Strategic Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Strategic Value 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 Federated Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Strategic Value has no effect on the direction of Citigroup i.e., Citigroup and Federated Strategic go up and down completely randomly.
Pair Corralation between Citigroup and Federated Strategic
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.07 times more return on investment than Federated Strategic. However, Citigroup is 2.07 times more volatile than Federated Strategic Value. It trades about 0.07 of its potential returns per unit of risk. Federated Strategic Value is currently generating about 0.03 per unit of risk. If you would invest 4,206 in Citigroup on August 26, 2024 and sell it today you would earn a total of 2,778 from holding Citigroup or generate 66.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Federated Strategic Value
Performance |
| Timeline |
| Citigroup |
| Federated Strategic Value |
Citigroup and Federated Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Federated Strategic
The main advantage of trading using opposite Citigroup and Federated Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Federated Strategic 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 Federated Strategic will offset losses from the drop in Federated Strategic's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| Federated Strategic vs. Federated Emerging Market | Federated Strategic vs. Federated Mdt All | Federated Strategic vs. Federated Global Allocation | Federated Strategic vs. Federated Hermes Emerging |
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.
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