Correlation Between CITIGROUP CDR and Enbridge Pref
Can any of the company-specific risk be diversified away by investing in both CITIGROUP CDR and Enbridge Pref 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 CDR and Enbridge Pref into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CITIGROUP CDR and Enbridge Pref 7, you can compare the effects of market volatilities on CITIGROUP CDR and Enbridge Pref 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 CDR with a short position of Enbridge Pref. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITIGROUP CDR and Enbridge Pref.
Diversification Opportunities for CITIGROUP CDR and Enbridge Pref
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between CITIGROUP and Enbridge is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding CITIGROUP CDR and Enbridge Pref 7 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enbridge Pref 7 and CITIGROUP CDR 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 CDR are associated (or correlated) with Enbridge Pref. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enbridge Pref 7 has no effect on the direction of CITIGROUP CDR i.e., CITIGROUP CDR and Enbridge Pref go up and down completely randomly.
Pair Corralation between CITIGROUP CDR and Enbridge Pref
Assuming the 90 days trading horizon CITIGROUP CDR is expected to generate 3.37 times more return on investment than Enbridge Pref. However, CITIGROUP CDR is 3.37 times more volatile than Enbridge Pref 7. It trades about 0.39 of its potential returns per unit of risk. Enbridge Pref 7 is currently generating about 0.58 per unit of risk. If you would invest 2,699 in CITIGROUP CDR on April 22, 2025 and sell it today you would earn a total of 1,217 from holding CITIGROUP CDR or generate 45.09% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
CITIGROUP CDR vs. Enbridge Pref 7
Performance |
Timeline |
CITIGROUP CDR |
Enbridge Pref 7 |
CITIGROUP CDR and Enbridge Pref Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CITIGROUP CDR and Enbridge Pref
The main advantage of trading using opposite CITIGROUP CDR and Enbridge Pref positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITIGROUP CDR position performs unexpectedly, Enbridge Pref 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 Enbridge Pref will offset losses from the drop in Enbridge Pref's long position.CITIGROUP CDR vs. Medical Facilities | CITIGROUP CDR vs. Arbor Metals Corp | CITIGROUP CDR vs. Osisko Metals | CITIGROUP CDR vs. Black Mammoth Metals |
Enbridge Pref vs. Enbridge Pref 5 | Enbridge Pref vs. Enbridge Pref 11 | Enbridge Pref vs. Enbridge Pref L | Enbridge Pref vs. E Split Corp |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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