Correlation Between Citigroup and California Bond
Can any of the company-specific risk be diversified away by investing in both Citigroup and California 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 California Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and California Bond Fund, you can compare the effects of market volatilities on Citigroup and California 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 California Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and California Bond.
Diversification Opportunities for Citigroup and California Bond
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Citigroup and California is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and California Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on California 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 California Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of California Bond has no effect on the direction of Citigroup i.e., Citigroup and California Bond go up and down completely randomly.
Pair Corralation between Citigroup and California Bond
Taking into account the 90-day investment horizon Citigroup is expected to generate 5.97 times more return on investment than California Bond. However, Citigroup is 5.97 times more volatile than California Bond Fund. It trades about 0.08 of its potential returns per unit of risk. California Bond Fund is currently generating about 0.07 per unit of risk. If you would invest 4,525 in Citigroup on August 31, 2024 and sell it today you would earn a total of 2,562 from holding Citigroup or generate 56.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Citigroup vs. California Bond Fund
Performance |
| Timeline |
| Citigroup |
| California Bond |
Citigroup and California Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and California Bond
The main advantage of trading using opposite Citigroup and California Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, California 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 California Bond will offset losses from the drop in California Bond's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| California Bond vs. Aqr Risk Balanced Modities | California Bond vs. California High Yield Municipal | California Bond vs. Ab High Income | California Bond vs. Pace High Yield |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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