Correlation Between Citigroup and Brinsmere
Can any of the company-specific risk be diversified away by investing in both Citigroup and Brinsmere 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 Brinsmere into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and The Brinsmere, you can compare the effects of market volatilities on Citigroup and Brinsmere 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 Brinsmere. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Brinsmere.
Diversification Opportunities for Citigroup and Brinsmere
Significant diversification
The 3 months correlation between Citigroup and Brinsmere is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and The Brinsmere in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brinsmere 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 Brinsmere. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brinsmere has no effect on the direction of Citigroup i.e., Citigroup and Brinsmere go up and down completely randomly.
Pair Corralation between Citigroup and Brinsmere
Taking into account the 90-day investment horizon Citigroup is expected to generate 4.85 times more return on investment than Brinsmere. However, Citigroup is 4.85 times more volatile than The Brinsmere. It trades about 0.16 of its potential returns per unit of risk. The Brinsmere is currently generating about 0.06 per unit of risk. If you would invest 6,092 in Citigroup on November 2, 2024 and sell it today you would earn a total of 2,094 from holding Citigroup or generate 34.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. The Brinsmere
Performance |
| Timeline |
| Citigroup |
| Brinsmere |
Citigroup and Brinsmere Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Brinsmere
The main advantage of trading using opposite Citigroup and Brinsmere positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Brinsmere 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 Brinsmere will offset losses from the drop in Brinsmere's long position.| Citigroup vs. Royal Bank of | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Canadian Imperial Bank |
| Brinsmere vs. Freedom Day Dividend | Brinsmere vs. Franklin Templeton ETF | Brinsmere vs. iShares MSCI China | Brinsmere vs. Tidal Trust II |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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