Correlation Between Citigroup and Intermediate Term
Can any of the company-specific risk be diversified away by investing in both Citigroup and Intermediate Term 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 Intermediate Term into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Intermediate Term Bond Fund, you can compare the effects of market volatilities on Citigroup and Intermediate Term 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 Intermediate Term. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Intermediate Term.
Diversification Opportunities for Citigroup and Intermediate Term
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Intermediate is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Intermediate Term Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intermediate Term Bond 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 Intermediate Term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intermediate Term Bond has no effect on the direction of Citigroup i.e., Citigroup and Intermediate Term go up and down completely randomly.
Pair Corralation between Citigroup and Intermediate Term
Taking into account the 90-day investment horizon Citigroup is expected to generate 4.29 times more return on investment than Intermediate Term. However, Citigroup is 4.29 times more volatile than Intermediate Term Bond Fund. It trades about 0.07 of its potential returns per unit of risk. Intermediate Term Bond Fund is currently generating about 0.05 per unit of risk. If you would invest 4,118 in Citigroup on August 29, 2024 and sell it today you would earn a total of 2,898 from holding Citigroup or generate 70.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Intermediate Term Bond Fund
Performance |
| Timeline |
| Citigroup |
| Intermediate Term Bond |
Citigroup and Intermediate Term Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Intermediate Term
The main advantage of trading using opposite Citigroup and Intermediate Term positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Intermediate Term 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 Intermediate Term will offset losses from the drop in Intermediate Term's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Intermediate Term vs. Prudential Government Income | Intermediate Term vs. Virtus Seix Government | Intermediate Term vs. Dreyfus Government Cash | Intermediate Term vs. Us Government Securities |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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