Correlation Between Citigroup and Short-term Bond
Can any of the company-specific risk be diversified away by investing in both Citigroup and Short-term Bond 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 Short-term Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Short Term Bond Fund, you can compare the effects of market volatilities on Citigroup and Short-term Bond 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 Short-term Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Short-term Bond.
Diversification Opportunities for Citigroup and Short-term Bond
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Citigroup and Short-term is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Short Term Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short 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 Short-term Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Term Bond has no effect on the direction of Citigroup i.e., Citigroup and Short-term Bond go up and down completely randomly.
Pair Corralation between Citigroup and Short-term Bond
Taking into account the 90-day investment horizon Citigroup is expected to generate 15.7 times more return on investment than Short-term Bond. However, Citigroup is 15.7 times more volatile than Short Term Bond Fund. It trades about 0.21 of its potential returns per unit of risk. Short Term Bond Fund is currently generating about 0.12 per unit of risk. If you would invest 6,360 in Citigroup on August 29, 2024 and sell it today you would earn a total of 615.00 from holding Citigroup or generate 9.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Citigroup vs. Short Term Bond Fund
Performance |
| Timeline |
| Citigroup |
| Short Term Bond |
Citigroup and Short-term Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Short-term Bond
The main advantage of trading using opposite Citigroup and Short-term Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Short-term Bond 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 Short-term Bond will offset losses from the drop in Short-term Bond's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Short-term Bond vs. Franklin Adjustable Government | Short-term Bond vs. Us Government Securities | Short-term Bond vs. Inverse Government Long | Short-term Bond vs. Fidelity Series Government |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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