Correlation Between Citigroup and 1290 High
Can any of the company-specific risk be diversified away by investing in both Citigroup and 1290 High 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 1290 High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and 1290 High Yield, you can compare the effects of market volatilities on Citigroup and 1290 High 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 1290 High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and 1290 High.
Diversification Opportunities for Citigroup and 1290 High
Very weak diversification
The 3 months correlation between Citigroup and 1290 is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and 1290 High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1290 High Yield 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 1290 High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1290 High Yield has no effect on the direction of Citigroup i.e., Citigroup and 1290 High go up and down completely randomly.
Pair Corralation between Citigroup and 1290 High
Taking into account the 90-day investment horizon Citigroup is expected to generate 6.63 times more return on investment than 1290 High. However, Citigroup is 6.63 times more volatile than 1290 High Yield. It trades about 0.07 of its potential returns per unit of risk. 1290 High Yield is currently generating about 0.14 per unit of risk. If you would invest 4,206 in Citigroup on August 26, 2024 and sell it today you would earn a total of 2,778 from holding Citigroup or generate 66.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. 1290 High Yield
Performance |
| Timeline |
| Citigroup |
| 1290 High Yield |
Citigroup and 1290 High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and 1290 High
The main advantage of trading using opposite Citigroup and 1290 High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, 1290 High 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 1290 High will offset losses from the drop in 1290 High's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| 1290 High vs. 1290 Funds | 1290 High vs. 1290 Essex Small | 1290 High vs. 1290 Funds | 1290 High vs. 1290 Smartbeta Equity |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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