Correlation Between Citigroup and City National
Can any of the company-specific risk be diversified away by investing in both Citigroup and City National 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 City National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and City National Rochdale, you can compare the effects of market volatilities on Citigroup and City National 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 City National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and City National.
Diversification Opportunities for Citigroup and City National
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Citigroup and City is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and City National Rochdale in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City National Rochdale 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 City National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of City National Rochdale has no effect on the direction of Citigroup i.e., Citigroup and City National go up and down completely randomly.
Pair Corralation between Citigroup and City National
Taking into account the 90-day investment horizon Citigroup is expected to generate 15.48 times more return on investment than City National. However, Citigroup is 15.48 times more volatile than City National Rochdale. It trades about 0.06 of its potential returns per unit of risk. City National Rochdale is currently generating about 0.12 per unit of risk. If you would invest 6,166 in Citigroup on September 3, 2024 and sell it today you would earn a total of 921.00 from holding Citigroup or generate 14.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. City National Rochdale
Performance |
| Timeline |
| Citigroup |
| City National Rochdale |
Citigroup and City National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and City National
The main advantage of trading using opposite Citigroup and City National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, City National 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 City National will offset losses from the drop in City National's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| City National vs. Fundvantage Trust | City National vs. Kinetics Market Opportunities | City National vs. Massmutual Select Diversified | City National vs. Templeton Developing Markets |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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