Correlation Between Citigroup and Pinnacle Value
Can any of the company-specific risk be diversified away by investing in both Citigroup and Pinnacle Value 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 Pinnacle Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Pinnacle Value Fund, you can compare the effects of market volatilities on Citigroup and Pinnacle Value 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 Pinnacle Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Pinnacle Value.
Diversification Opportunities for Citigroup and Pinnacle Value
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Citigroup and Pinnacle is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Pinnacle Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinnacle Value 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 Pinnacle Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinnacle Value has no effect on the direction of Citigroup i.e., Citigroup and Pinnacle Value go up and down completely randomly.
Pair Corralation between Citigroup and Pinnacle Value
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.43 times more return on investment than Pinnacle Value. However, Citigroup is 2.33 times less risky than Pinnacle Value. It trades about -0.04 of its potential returns per unit of risk. Pinnacle Value Fund is currently generating about -0.21 per unit of risk. If you would invest 7,186 in Citigroup on October 8, 2024 and sell it today you would lose (86.00) from holding Citigroup or give up 1.2% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Citigroup vs. Pinnacle Value Fund
Performance |
Timeline |
Citigroup |
Pinnacle Value |
Citigroup and Pinnacle Value Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Citigroup and Pinnacle Value
The main advantage of trading using opposite Citigroup and Pinnacle Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Pinnacle Value 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 Pinnacle Value will offset losses from the drop in Pinnacle Value's long position.Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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