Correlation Between Citigroup and Tcw High
Can any of the company-specific risk be diversified away by investing in both Citigroup and Tcw High 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 High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Tcw High Yield, you can compare the effects of market volatilities on Citigroup and Tcw High 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 High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Tcw High.
Diversification Opportunities for Citigroup and Tcw High
Very poor diversification
The 3 months correlation between Citigroup and Tcw is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Tcw High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tcw High Yield 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 High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tcw High Yield has no effect on the direction of Citigroup i.e., Citigroup and Tcw High go up and down completely randomly.
Pair Corralation between Citigroup and Tcw High
Taking into account the 90-day investment horizon Citigroup is expected to generate 7.49 times less return on investment than Tcw High. But when comparing it to its historical volatility, Citigroup is 12.78 times less risky than Tcw High. It trades about 0.09 of its potential returns per unit of risk. Tcw High Yield is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 539.00 in Tcw High Yield on August 26, 2024 and sell it today you would earn a total of 2,534 from holding Tcw High Yield or generate 470.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Tcw High Yield
Performance |
| Timeline |
| Citigroup |
| Tcw High Yield |
Citigroup and Tcw High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Tcw High
The main advantage of trading using opposite Citigroup and Tcw High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Tcw High 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 High will offset losses from the drop in Tcw High's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| Tcw High vs. 1919 Financial Services | Tcw High vs. Fidelity Advisor Financial | Tcw High vs. Icon Financial Fund | Tcw High vs. Royce Global Financial |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |