Correlation Between Citigroup and Thornburg New
Can any of the company-specific risk be diversified away by investing in both Citigroup and Thornburg New 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 New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Thornburg New York, you can compare the effects of market volatilities on Citigroup and Thornburg New 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 New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Thornburg New.
Diversification Opportunities for Citigroup and Thornburg New
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Thornburg is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Thornburg New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg New York 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 New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thornburg New York has no effect on the direction of Citigroup i.e., Citigroup and Thornburg New go up and down completely randomly.
Pair Corralation between Citigroup and Thornburg New
Taking into account the 90-day investment horizon Citigroup is expected to generate 10.19 times more return on investment than Thornburg New. However, Citigroup is 10.19 times more volatile than Thornburg New York. It trades about 0.12 of its potential returns per unit of risk. Thornburg New York is currently generating about 0.11 per unit of risk. If you would invest 3,936 in Citigroup on August 30, 2024 and sell it today you would earn a total of 3,080 from holding Citigroup or generate 78.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Thornburg New York
Performance |
| Timeline |
| Citigroup |
| Thornburg New York |
Citigroup and Thornburg New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Thornburg New
The main advantage of trading using opposite Citigroup and Thornburg New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Thornburg New 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 New will offset losses from the drop in Thornburg New's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Thornburg New vs. Vanguard Short Term Federal | Thornburg New vs. Calvert Short Duration | Thornburg New vs. Federated Short Intermediate Duration | Thornburg New vs. Rbc Short Duration |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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