Correlation Between Citigroup and Tcw Emerging
Can any of the company-specific risk be diversified away by investing in both Citigroup and Tcw Emerging 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 Tcw Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Tcw Emerging Markets, you can compare the effects of market volatilities on Citigroup and Tcw Emerging 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 Tcw Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Tcw Emerging.
Diversification Opportunities for Citigroup and Tcw Emerging
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Tcw is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Tcw Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tcw Emerging Markets 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 Tcw Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tcw Emerging Markets has no effect on the direction of Citigroup i.e., Citigroup and Tcw Emerging go up and down completely randomly.
Pair Corralation between Citigroup and Tcw Emerging
Taking into account the 90-day investment horizon Citigroup is expected to generate 3.95 times more return on investment than Tcw Emerging. However, Citigroup is 3.95 times more volatile than Tcw Emerging Markets. It trades about 0.08 of its potential returns per unit of risk. Tcw Emerging Markets is currently generating about 0.12 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Tcw Emerging Markets
Performance |
| Timeline |
| Citigroup |
| Tcw Emerging Markets |
Citigroup and Tcw Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Tcw Emerging
The main advantage of trading using opposite Citigroup and Tcw Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Tcw Emerging 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 Tcw Emerging will offset losses from the drop in Tcw Emerging's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Tcw Emerging vs. Locorr Market Trend | Tcw Emerging vs. Sp Midcap Index | Tcw Emerging vs. Calvert Developed Market | Tcw Emerging vs. Vanguard Developed Markets |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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