Correlation Between Citigroup and Growth Fund
Can any of the company-specific risk be diversified away by investing in both Citigroup and Growth Fund 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 Growth Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Growth Fund C, you can compare the effects of market volatilities on Citigroup and Growth Fund 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 Growth Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Growth Fund.
Diversification Opportunities for Citigroup and Growth Fund
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Growth is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Growth Fund C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Fund C 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 Growth Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Fund C has no effect on the direction of Citigroup i.e., Citigroup and Growth Fund go up and down completely randomly.
Pair Corralation between Citigroup and Growth Fund
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.04 times more return on investment than Growth Fund. However, Citigroup is 2.04 times more volatile than Growth Fund C. It trades about 0.12 of its potential returns per unit of risk. Growth Fund C is currently generating about 0.14 per unit of risk. If you would invest 6,092 in Citigroup on August 31, 2024 and sell it today you would earn a total of 924.00 from holding Citigroup or generate 15.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Growth Fund C
Performance |
| Timeline |
| Citigroup |
| Growth Fund C |
Citigroup and Growth Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Growth Fund
The main advantage of trading using opposite Citigroup and Growth Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Growth Fund 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 Growth Fund will offset losses from the drop in Growth Fund's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Growth Fund vs. Transamerica Emerging Markets | Growth Fund vs. Goldman Sachs Emerging | Growth Fund vs. Rbc Emerging Markets | Growth Fund vs. Locorr Market Trend |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |