Correlation Between Citigroup and Swan Defined
Can any of the company-specific risk be diversified away by investing in both Citigroup and Swan Defined 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 Swan Defined into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Swan Defined Risk, you can compare the effects of market volatilities on Citigroup and Swan Defined 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 Swan Defined. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Swan Defined.
Diversification Opportunities for Citigroup and Swan Defined
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Swan is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Swan Defined Risk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swan Defined Risk 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 Swan Defined. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swan Defined Risk has no effect on the direction of Citigroup i.e., Citigroup and Swan Defined go up and down completely randomly.
Pair Corralation between Citigroup and Swan Defined
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.73 times more return on investment than Swan Defined. However, Citigroup is 1.73 times more volatile than Swan Defined Risk. It trades about 0.14 of its potential returns per unit of risk. Swan Defined Risk is currently generating about 0.02 per unit of risk. If you would invest 6,255 in Citigroup on September 23, 2024 and sell it today you would earn a total of 664.00 from holding Citigroup or generate 10.62% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Citigroup vs. Swan Defined Risk
Performance |
Timeline |
Citigroup |
Swan Defined Risk |
Citigroup and Swan Defined Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Citigroup and Swan Defined
The main advantage of trading using opposite Citigroup and Swan Defined positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Swan Defined 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 Swan Defined will offset losses from the drop in Swan Defined's long position.Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. Canadian Imperial Bank | Citigroup vs. Bank of Montreal |
Swan Defined vs. Swan Defined Risk | Swan Defined vs. Swan Defined Risk | Swan Defined vs. Swan Defined Risk | Swan Defined vs. Swan Defined Risk |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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