Correlation Between Citigroup and BMO Laddered
Can any of the company-specific risk be diversified away by investing in both Citigroup and BMO Laddered 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 BMO Laddered into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and BMO Laddered Preferred, you can compare the effects of market volatilities on Citigroup and BMO Laddered 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 BMO Laddered. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and BMO Laddered.
Diversification Opportunities for Citigroup and BMO Laddered
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citigroup and BMO is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and BMO Laddered Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BMO Laddered Preferred 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 BMO Laddered. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BMO Laddered Preferred has no effect on the direction of Citigroup i.e., Citigroup and BMO Laddered go up and down completely randomly.
Pair Corralation between Citigroup and BMO Laddered
Taking into account the 90-day investment horizon Citigroup is expected to generate 3.84 times more return on investment than BMO Laddered. However, Citigroup is 3.84 times more volatile than BMO Laddered Preferred. It trades about 0.07 of its potential returns per unit of risk. BMO Laddered Preferred is currently generating about 0.11 per unit of risk. If you would invest 6,079 in Citigroup on September 1, 2024 and sell it today you would earn a total of 1,008 from holding Citigroup or generate 16.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Citigroup vs. BMO Laddered Preferred
Performance |
| Timeline |
| Citigroup |
| BMO Laddered Preferred |
Citigroup and BMO Laddered Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and BMO Laddered
The main advantage of trading using opposite Citigroup and BMO Laddered positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, BMO Laddered 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 BMO Laddered will offset losses from the drop in BMO Laddered's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| BMO Laddered vs. iShares SPTSX Canadian | BMO Laddered vs. Global X Active | BMO Laddered vs. BMO Europe High | BMO Laddered vs. BMO Equal Weight |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| CEOs Directory Screen CEOs from public companies around the world |