Correlation Between Citigroup and Dfa Inv

Can any of the company-specific risk be diversified away by investing in both Citigroup and Dfa Inv 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 Dfa Inv into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Citigroup and Dfa Inv Dimensions, you can compare the effects of market volatilities on Citigroup and Dfa Inv 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 Dfa Inv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Dfa Inv.

Diversification Opportunities for Citigroup and Dfa Inv

0.09

Correlation Coefficient

Citigroup  Dfa Inv

Significant diversification

The 3 months correlation between Citigroup and Dfa is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Dfa Inv Dimensions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dfa Inv Dimensions 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 Dfa Inv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dfa Inv Dimensions has no effect on the direction of Citigroup i.e., Citigroup and Dfa Inv go up and down completely randomly.

Pair Corralation between Citigroup and Dfa Inv

If you would invest  4,429  in Citigroup on September 24, 2024 and sell it today you would earn a total of  2,490  from holding Citigroup or generate 56.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	0.28%
Values	Daily Returns

Citigroup  vs.  Dfa Inv Dimensions

Citigroup

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Dfa Inv Dimensions

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dfa Inv Dimensions has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Dfa Inv is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Citigroup and Dfa Inv

The main advantage of trading using opposite Citigroup and Dfa Inv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Dfa Inv 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 Dfa Inv will offset losses from the drop in Dfa Inv's long position.

The idea behind Citigroup and Dfa Inv Dimensions pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.