Correlation Between Arrow Dwa and Citigroup
Can any of the company-specific risk be diversified away by investing in both Arrow Dwa and Citigroup 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 Arrow Dwa and Citigroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arrow Dwa Balanced and Citigroup, you can compare the effects of market volatilities on Arrow Dwa and Citigroup 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 Arrow Dwa with a short position of Citigroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Dwa and Citigroup.
Diversification Opportunities for Arrow Dwa and Citigroup
Very poor diversification
The 3 months correlation between Arrow and Citigroup is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Dwa Balanced and Citigroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup and Arrow Dwa 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 Arrow Dwa Balanced are associated (or correlated) with Citigroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citigroup has no effect on the direction of Arrow Dwa i.e., Arrow Dwa and Citigroup go up and down completely randomly.
Pair Corralation between Arrow Dwa and Citigroup
Assuming the 90 days horizon Arrow Dwa is expected to generate 39.11 times less return on investment than Citigroup. But when comparing it to its historical volatility, Arrow Dwa Balanced is 2.74 times less risky than Citigroup. It trades about 0.0 of its potential returns per unit of risk. Citigroup is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 4,784 in Citigroup on January 26, 2024 and sell it today you would earn a total of 1,463 from holding Citigroup or generate 30.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Arrow Dwa Balanced vs. Citigroup
Performance |
| Timeline |
| Arrow Dwa Balanced |
| Citigroup |
Arrow Dwa and Citigroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow Dwa and Citigroup
The main advantage of trading using opposite Arrow Dwa and Citigroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Dwa position performs unexpectedly, Citigroup 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 Citigroup will offset losses from the drop in Citigroup's long position.| Arrow Dwa vs. Arrow Managed Futures | Arrow Dwa vs. Arrow Managed Futures | Arrow Dwa vs. Arrow Dwa Balanced | Arrow Dwa vs. Sp 500 Index |
| Citigroup vs. Aquagold International | Citigroup vs. Thrivent High Yield | Citigroup vs. Morningstar Unconstrained Allocation | Citigroup vs. Via Renewables |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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