Correlation Between Citigroup and Timothy Large/mip-cap
Can any of the company-specific risk be diversified away by investing in both Citigroup and Timothy Large/mip-cap 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 Timothy Large/mip-cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Timothy Largemip Cap Growth, you can compare the effects of market volatilities on Citigroup and Timothy Large/mip-cap 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 Timothy Large/mip-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Timothy Large/mip-cap.
Diversification Opportunities for Citigroup and Timothy Large/mip-cap
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and TIMOTHY is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Timothy Largemip Cap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timothy Large/mip-cap 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 Timothy Large/mip-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Timothy Large/mip-cap has no effect on the direction of Citigroup i.e., Citigroup and Timothy Large/mip-cap go up and down completely randomly.
Pair Corralation between Citigroup and Timothy Large/mip-cap
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.47 times more return on investment than Timothy Large/mip-cap. However, Citigroup is 1.47 times more volatile than Timothy Largemip Cap Growth. It trades about 0.06 of its potential returns per unit of risk. Timothy Largemip Cap Growth is currently generating about 0.08 per unit of risk. If you would invest 4,733 in Citigroup on August 27, 2024 and sell it today you would earn a total of 2,251 from holding Citigroup or generate 47.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Timothy Largemip Cap Growth
Performance |
| Timeline |
| Citigroup |
| Timothy Large/mip-cap |
Citigroup and Timothy Large/mip-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Timothy Large/mip-cap
The main advantage of trading using opposite Citigroup and Timothy Large/mip-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Timothy Large/mip-cap 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 Timothy Large/mip-cap will offset losses from the drop in Timothy Large/mip-cap's long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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