Correlation Between Citigroup and Thornburg Core
Can any of the company-specific risk be diversified away by investing in both Citigroup and Thornburg Core 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 Thornburg Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Thornburg Core Plus, you can compare the effects of market volatilities on Citigroup and Thornburg Core 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 Thornburg Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Thornburg Core.
Diversification Opportunities for Citigroup and Thornburg Core
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Thornburg is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Thornburg Core Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg Core Plus 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 Thornburg Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thornburg Core Plus has no effect on the direction of Citigroup i.e., Citigroup and Thornburg Core go up and down completely randomly.
Pair Corralation between Citigroup and Thornburg Core
Taking into account the 90-day investment horizon Citigroup is expected to generate 5.04 times more return on investment than Thornburg Core. However, Citigroup is 5.04 times more volatile than Thornburg Core Plus. It trades about 0.21 of its potential returns per unit of risk. Thornburg Core Plus is currently generating about 0.06 per unit of risk. If you would invest 6,412 in Citigroup on August 30, 2024 and sell it today you would earn a total of 604.00 from holding Citigroup or generate 9.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Thornburg Core Plus
Performance |
| Timeline |
| Citigroup |
| Thornburg Core Plus |
Citigroup and Thornburg Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Thornburg Core
The main advantage of trading using opposite Citigroup and Thornburg Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Thornburg Core 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 Thornburg Core will offset losses from the drop in Thornburg Core's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Thornburg Core vs. T Rowe Price | Thornburg Core vs. Enhanced Large Pany | Thornburg Core vs. T Rowe Price | Thornburg Core vs. Hartford Moderate Allocation |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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