Correlation Between Citigroup and Baillie Gifford
Can any of the company-specific risk be diversified away by investing in both Citigroup and Baillie Gifford 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 Baillie Gifford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Baillie Gifford Growth, you can compare the effects of market volatilities on Citigroup and Baillie Gifford 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 Baillie Gifford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Baillie Gifford.
Diversification Opportunities for Citigroup and Baillie Gifford
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Citigroup and Baillie is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Baillie Gifford Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baillie Gifford Growth 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 Baillie Gifford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baillie Gifford Growth has no effect on the direction of Citigroup i.e., Citigroup and Baillie Gifford go up and down completely randomly.
Pair Corralation between Citigroup and Baillie Gifford
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.94 times less return on investment than Baillie Gifford. But when comparing it to its historical volatility, Citigroup is 1.04 times less risky than Baillie Gifford. It trades about 0.26 of its potential returns per unit of risk. Baillie Gifford Growth is currently generating about 0.47 of returns per unit of risk over similar time horizon. If you would invest 21,700 in Baillie Gifford Growth on September 1, 2024 and sell it today you would earn a total of 5,400 from holding Baillie Gifford Growth or generate 24.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Citigroup vs. Baillie Gifford Growth
Performance |
| Timeline |
| Citigroup |
| Baillie Gifford Growth |
Citigroup and Baillie Gifford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Baillie Gifford
The main advantage of trading using opposite Citigroup and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Baillie Gifford 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 Baillie Gifford will offset losses from the drop in Baillie Gifford's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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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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