Correlation Between Citigroup and Touchstone Sands
Can any of the company-specific risk be diversified away by investing in both Citigroup and Touchstone Sands 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 Sands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Touchstone Sands Capital, you can compare the effects of market volatilities on Citigroup and Touchstone Sands 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 Sands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Touchstone Sands.
Diversification Opportunities for Citigroup and Touchstone Sands
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Citigroup and Touchstone is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Touchstone Sands Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone Sands Capital 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 Sands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone Sands Capital has no effect on the direction of Citigroup i.e., Citigroup and Touchstone Sands go up and down completely randomly.
Pair Corralation between Citigroup and Touchstone Sands
Taking into account the 90-day investment horizon Citigroup is expected to generate 98.38 times less return on investment than Touchstone Sands. But when comparing it to its historical volatility, Citigroup is 154.69 times less risky than Touchstone Sands. It trades about 0.45 of its potential returns per unit of risk. Touchstone Sands Capital is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 0.00 in Touchstone Sands Capital on October 23, 2024 and sell it today you would earn a total of 2,589 from holding Touchstone Sands Capital or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 63.16% |
| Values | Daily Returns |
Citigroup vs. Touchstone Sands Capital
Performance |
| Timeline |
| Citigroup |
| Touchstone Sands Capital |
Citigroup and Touchstone Sands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Touchstone Sands
The main advantage of trading using opposite Citigroup and Touchstone Sands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Touchstone Sands 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 Sands will offset losses from the drop in Touchstone Sands' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Touchstone Sands vs. Vanguard Total Stock | Touchstone Sands vs. SPDR SP 500 | Touchstone Sands vs. iShares Core SP | Touchstone Sands vs. Vanguard Total Bond |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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