Correlation Between Citigroup and Mainstay Defined
Can any of the company-specific risk be diversified away by investing in both Citigroup and Mainstay Defined 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 Mainstay Defined into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Mainstay Defined Term, you can compare the effects of market volatilities on Citigroup and Mainstay Defined 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 Mainstay Defined. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Mainstay Defined.
Diversification Opportunities for Citigroup and Mainstay Defined
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Mainstay is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Mainstay Defined Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Defined Term 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 Mainstay Defined. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Defined Term has no effect on the direction of Citigroup i.e., Citigroup and Mainstay Defined go up and down completely randomly.
Pair Corralation between Citigroup and Mainstay Defined
Taking into account the 90-day investment horizon Citigroup is expected to generate 4.47 times more return on investment than Mainstay Defined. However, Citigroup is 4.47 times more volatile than Mainstay Defined Term. It trades about 0.25 of its potential returns per unit of risk. Mainstay Defined Term is currently generating about 0.36 per unit of risk. If you would invest 6,902 in Citigroup on September 13, 2024 and sell it today you would earn a total of 294.00 from holding Citigroup or generate 4.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Mainstay Defined Term
Performance |
| Timeline |
| Citigroup |
| Mainstay Defined Term |
Citigroup and Mainstay Defined Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Mainstay Defined
The main advantage of trading using opposite Citigroup and Mainstay Defined positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Mainstay Defined 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 Mainstay Defined will offset losses from the drop in Mainstay Defined's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Mainstay Defined vs. World Energy Fund | Mainstay Defined vs. Alpsalerian Energy Infrastructure | Mainstay Defined vs. Oil Gas Ultrasector | Mainstay Defined vs. Fidelity Advisor Energy |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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