Correlation Between Citigroup and Touchstone Funds
Can any of the company-specific risk be diversified away by investing in both Citigroup and Touchstone Funds 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 Touchstone Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Touchstone Funds Group, you can compare the effects of market volatilities on Citigroup and Touchstone Funds 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 Touchstone Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Touchstone Funds.
Diversification Opportunities for Citigroup and Touchstone Funds
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Touchstone is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Touchstone Funds Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone Funds 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 Touchstone Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone Funds has no effect on the direction of Citigroup i.e., Citigroup and Touchstone Funds go up and down completely randomly.
Pair Corralation between Citigroup and Touchstone Funds
Taking into account the 90-day investment horizon Citigroup is expected to generate 5.83 times more return on investment than Touchstone Funds. However, Citigroup is 5.83 times more volatile than Touchstone Funds Group. It trades about 0.32 of its potential returns per unit of risk. Touchstone Funds Group is currently generating about 0.14 per unit of risk. If you would invest 6,235 in Citigroup on September 3, 2024 and sell it today you would earn a total of 852.00 from holding Citigroup or generate 13.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Touchstone Funds Group
Performance |
| Timeline |
| Citigroup |
| Touchstone Funds |
Citigroup and Touchstone Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Touchstone Funds
The main advantage of trading using opposite Citigroup and Touchstone Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Touchstone Funds 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 Touchstone Funds will offset losses from the drop in Touchstone Funds' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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