Correlation Between Citigroup and Westcore Small-cap
Can any of the company-specific risk be diversified away by investing in both Citigroup and Westcore Small-cap 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 Westcore Small-cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Westcore Small Cap Growth, you can compare the effects of market volatilities on Citigroup and Westcore Small-cap 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 Westcore Small-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Westcore Small-cap.
Diversification Opportunities for Citigroup and Westcore Small-cap
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Citigroup and Westcore is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Westcore Small Cap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westcore Small Cap 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 Westcore Small-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westcore Small Cap has no effect on the direction of Citigroup i.e., Citigroup and Westcore Small-cap go up and down completely randomly.
Pair Corralation between Citigroup and Westcore Small-cap
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.41 times more return on investment than Westcore Small-cap. However, Citigroup is 1.41 times more volatile than Westcore Small Cap Growth. It trades about 0.11 of its potential returns per unit of risk. Westcore Small Cap Growth is currently generating about 0.07 per unit of risk. If you would invest 5,308 in Citigroup on November 3, 2024 and sell it today you would earn a total of 2,835 from holding Citigroup or generate 53.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Citigroup vs. Westcore Small Cap Growth
Performance |
| Timeline |
| Citigroup |
| Westcore Small Cap |
Citigroup and Westcore Small-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Westcore Small-cap
The main advantage of trading using opposite Citigroup and Westcore Small-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Westcore Small-cap 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 Westcore Small-cap will offset losses from the drop in Westcore Small-cap's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Westcore Small-cap vs. Morningstar Defensive Bond | Westcore Small-cap vs. Angel Oak Financial | Westcore Small-cap vs. Siit High Yield | Westcore Small-cap vs. Ab Bond Inflation |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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