Correlation Between Citigroup and Mfs Diversified
Can any of the company-specific risk be diversified away by investing in both Citigroup and Mfs Diversified 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 Mfs Diversified into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Mfs Diversified Income, you can compare the effects of market volatilities on Citigroup and Mfs Diversified 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 Mfs Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Mfs Diversified.
Diversification Opportunities for Citigroup and Mfs Diversified
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citigroup and Mfs is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Mfs Diversified Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Diversified Income 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 Mfs Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Diversified Income has no effect on the direction of Citigroup i.e., Citigroup and Mfs Diversified go up and down completely randomly.
Pair Corralation between Citigroup and Mfs Diversified
Taking into account the 90-day investment horizon Citigroup is expected to generate 3.52 times more return on investment than Mfs Diversified. However, Citigroup is 3.52 times more volatile than Mfs Diversified Income. It trades about 0.18 of its potential returns per unit of risk. Mfs Diversified Income is currently generating about 0.05 per unit of risk. If you would invest 5,454 in Citigroup on February 7, 2024 and sell it today you would earn a total of 827.00 from holding Citigroup or generate 15.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Mfs Diversified Income
Performance |
| Timeline |
| Citigroup |
| Mfs Diversified Income |
Citigroup and Mfs Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Mfs Diversified
The main advantage of trading using opposite Citigroup and Mfs Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Mfs Diversified 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 Mfs Diversified will offset losses from the drop in Mfs Diversified's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Mfs Diversified vs. Mfs Prudent Investor | Mfs Diversified vs. Mfs Prudent Investor | Mfs Diversified vs. Mfs Prudent Investor | Mfs Diversified vs. Mfs Prudent Investor |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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