Correlation Between Citigroup and Short Intermediate
Can any of the company-specific risk be diversified away by investing in both Citigroup and Short Intermediate 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 Short Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Short Intermediate Bond Fund, you can compare the effects of market volatilities on Citigroup and Short Intermediate 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 Short Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Short Intermediate.
Diversification Opportunities for Citigroup and Short Intermediate
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Short is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Short Intermediate Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Intermediate 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 Short Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Intermediate Bond has no effect on the direction of Citigroup i.e., Citigroup and Short Intermediate go up and down completely randomly.
Pair Corralation between Citigroup and Short Intermediate
Taking into account the 90-day investment horizon Citigroup is expected to generate 11.15 times more return on investment than Short Intermediate. However, Citigroup is 11.15 times more volatile than Short Intermediate Bond Fund. It trades about 0.39 of its potential returns per unit of risk. Short Intermediate Bond Fund is currently generating about 0.14 per unit of risk. If you would invest 6,789 in Citigroup on April 25, 2025 and sell it today you would earn a total of 2,810 from holding Citigroup or generate 41.39% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 98.39% |
Values | Daily Returns |
Citigroup vs. Short Intermediate Bond Fund
Performance |
Timeline |
Citigroup |
Short Intermediate Bond |
Citigroup and Short Intermediate Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Citigroup and Short Intermediate
The main advantage of trading using opposite Citigroup and Short Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Short Intermediate 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 Short Intermediate will offset losses from the drop in Short Intermediate's long position.Citigroup vs. Bank of America | Citigroup vs. Wells Fargo | Citigroup vs. JPMorgan Chase Co | Citigroup vs. Toronto Dominion Bank |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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