Correlation Between Citigroup and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Citigroup and Goldman Sachs 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 Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Goldman Sachs Local, you can compare the effects of market volatilities on Citigroup and Goldman Sachs 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 Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Goldman Sachs.
Diversification Opportunities for Citigroup and Goldman Sachs
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Goldman is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Goldman Sachs Local in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Local 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 Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs Local has no effect on the direction of Citigroup i.e., Citigroup and Goldman Sachs go up and down completely randomly.
Pair Corralation between Citigroup and Goldman Sachs
Taking into account the 90-day investment horizon Citigroup is expected to under-perform the Goldman Sachs. In addition to that, Citigroup is 6.37 times more volatile than Goldman Sachs Local. It trades about -0.1 of its total potential returns per unit of risk. Goldman Sachs Local is currently generating about -0.11 per unit of volatility. If you would invest 396.00 in Goldman Sachs Local on January 20, 2024 and sell it today you would lose (2.00) from holding Goldman Sachs Local or give up 0.51% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Citigroup vs. Goldman Sachs Local
Performance |
Timeline |
Citigroup |
Goldman Sachs Local |
Citigroup and Goldman Sachs Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Citigroup and Goldman Sachs
The main advantage of trading using opposite Citigroup and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Goldman Sachs 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 Goldman Sachs will offset losses from the drop in Goldman Sachs' long position.Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean |
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 AI Investment Finder module to use AI to screen and filter profitable investment opportunities.
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