Correlation Between Citigroup and Mydestination 2055

Can any of the company-specific risk be diversified away by investing in both Citigroup and Mydestination 2055 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 Mydestination 2055 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Citigroup and Mydestination 2055 Fund, you can compare the effects of market volatilities on Citigroup and Mydestination 2055 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 Mydestination 2055. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Mydestination 2055.

Diversification Opportunities for Citigroup and Mydestination 2055

0.9

Correlation Coefficient

Citigroup  Mydestination 2055

Almost no diversification

The 3 months correlation between Citigroup and MYDESTINATION is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Mydestination 2055 Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mydestination 2055 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 Mydestination 2055. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mydestination 2055 has no effect on the direction of Citigroup i.e., Citigroup and Mydestination 2055 go up and down completely randomly.

Pair Corralation between Citigroup and Mydestination 2055

Taking into account the 90-day investment horizon Citigroup is expected to generate 2.42 times more return on investment than Mydestination 2055. However, Citigroup is 2.42 times more volatile than Mydestination 2055 Fund. It trades about 0.01 of its potential returns per unit of risk. Mydestination 2055 Fund is currently generating about -0.02 per unit of risk. If you would invest  6,991  in Citigroup on December 30, 2024 and sell it today you would earn a total of  42.00  from holding Citigroup or generate 0.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Citigroup  vs.  Mydestination 2055 Fund

Citigroup

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Citigroup is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Mydestination 2055

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mydestination 2055 Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Mydestination 2055 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 Mydestination 2055

The main advantage of trading using opposite Citigroup and Mydestination 2055 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Mydestination 2055 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 Mydestination 2055 will offset losses from the drop in Mydestination 2055's long position.

The idea behind Citigroup and Mydestination 2055 Fund 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.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.