Correlation Between Citigroup and Tiaa-cref Lifecycle
Can any of the company-specific risk be diversified away by investing in both Citigroup and Tiaa-cref Lifecycle 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 Tiaa-cref Lifecycle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Tiaa Cref Lifecycle 2050, you can compare the effects of market volatilities on Citigroup and Tiaa-cref Lifecycle 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 Tiaa-cref Lifecycle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Tiaa-cref Lifecycle.
Diversification Opportunities for Citigroup and Tiaa-cref Lifecycle
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Tiaa-cref is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Tiaa Cref Lifecycle 2050 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa Cref Lifecycle 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 Tiaa-cref Lifecycle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tiaa Cref Lifecycle has no effect on the direction of Citigroup i.e., Citigroup and Tiaa-cref Lifecycle go up and down completely randomly.
Pair Corralation between Citigroup and Tiaa-cref Lifecycle
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.15 times more return on investment than Tiaa-cref Lifecycle. However, Citigroup is 2.15 times more volatile than Tiaa Cref Lifecycle 2050. It trades about 0.08 of its potential returns per unit of risk. Tiaa Cref Lifecycle 2050 is currently generating about 0.09 per unit of risk. If you would invest 4,558 in Citigroup on September 2, 2024 and sell it today you would earn a total of 2,529 from holding Citigroup or generate 55.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Tiaa Cref Lifecycle 2050
Performance |
| Timeline |
| Citigroup |
| Tiaa Cref Lifecycle |
Citigroup and Tiaa-cref Lifecycle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Tiaa-cref Lifecycle
The main advantage of trading using opposite Citigroup and Tiaa-cref Lifecycle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Tiaa-cref Lifecycle 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 Tiaa-cref Lifecycle will offset losses from the drop in Tiaa-cref Lifecycle's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Tiaa-cref Lifecycle vs. Issachar Fund Class | Tiaa-cref Lifecycle vs. Semiconductor Ultrasector Profund | Tiaa-cref Lifecycle vs. Small Cap Stock | Tiaa-cref Lifecycle vs. Qs Growth Fund |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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