Correlation Between City National and Us Government
Can any of the company-specific risk be diversified away by investing in both City National and Us Government 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 City National and Us Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between City National Rochdale and Us Government Securities, you can compare the effects of market volatilities on City National and Us Government 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 City National with a short position of Us Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of City National and Us Government.
Diversification Opportunities for City National and Us Government
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between City and RGVEX is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding City National Rochdale and Us Government Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Us Government Securities and City National 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 City National Rochdale are associated (or correlated) with Us Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Us Government Securities has no effect on the direction of City National i.e., City National and Us Government go up and down completely randomly.
Pair Corralation between City National and Us Government
Assuming the 90 days horizon City National Rochdale is expected to generate 0.31 times more return on investment than Us Government. However, City National Rochdale is 3.21 times less risky than Us Government. It trades about 0.25 of its potential returns per unit of risk. Us Government Securities is currently generating about 0.02 per unit of risk. If you would invest 1,838 in City National Rochdale on November 3, 2024 and sell it today you would earn a total of 124.00 from holding City National Rochdale or generate 6.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
City National Rochdale vs. Us Government Securities
Performance |
| Timeline |
| City National Rochdale |
| Us Government Securities |
City National and Us Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with City National and Us Government
The main advantage of trading using opposite City National and Us Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if City National position performs unexpectedly, Us Government 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 Us Government will offset losses from the drop in Us Government's long position.| City National vs. Jpmorgan Ultra Short Municipal | City National vs. Federated Government Income | City National vs. Transamerica Intermediate Muni | City National vs. Hartford Municipal Short |
| Us Government vs. Lord Abbett Convertible | Us Government vs. Putnam Convertible Securities | Us Government vs. Columbia Convertible Securities | Us Government vs. Allianzgi Convertible Income |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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