Correlation Between Citigroup and Thornburg Low
Can any of the company-specific risk be diversified away by investing in both Citigroup and Thornburg Low 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 Low into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Thornburg Low Duration, you can compare the effects of market volatilities on Citigroup and Thornburg Low 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 Low. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Thornburg Low.
Diversification Opportunities for Citigroup and Thornburg Low
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Thornburg is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Thornburg Low Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg Low Duration 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 Low. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thornburg Low Duration has no effect on the direction of Citigroup i.e., Citigroup and Thornburg Low go up and down completely randomly.
Pair Corralation between Citigroup and Thornburg Low
Taking into account the 90-day investment horizon Citigroup is expected to generate 16.32 times more return on investment than Thornburg Low. However, Citigroup is 16.32 times more volatile than Thornburg Low Duration. It trades about 0.11 of its potential returns per unit of risk. Thornburg Low Duration is currently generating about 0.21 per unit of risk. If you would invest 4,642 in Citigroup on September 4, 2024 and sell it today you would earn a total of 2,497 from holding Citigroup or generate 53.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
Citigroup vs. Thornburg Low Duration
Performance |
| Timeline |
| Citigroup |
| Thornburg Low Duration |
Citigroup and Thornburg Low Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Thornburg Low
The main advantage of trading using opposite Citigroup and Thornburg Low positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Thornburg Low 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 Low will offset losses from the drop in Thornburg Low's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Thornburg Low vs. Thornburg Value Fund | Thornburg Low vs. Thornburg Value Fund | Thornburg Low vs. Thornburg International Value | Thornburg Low vs. Thornburg International Value |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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