Correlation Between Citigroup and Emerging Markets
Can any of the company-specific risk be diversified away by investing in both Citigroup and Emerging Markets 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 Emerging Markets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Emerging Markets Sustainability, you can compare the effects of market volatilities on Citigroup and Emerging Markets 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 Emerging Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Emerging Markets.
Diversification Opportunities for Citigroup and Emerging Markets
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Citigroup and Emerging is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Emerging Markets Sustainabilit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets Sus 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 Emerging Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Markets Sus has no effect on the direction of Citigroup i.e., Citigroup and Emerging Markets go up and down completely randomly.
Pair Corralation between Citigroup and Emerging Markets
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.3 times more return on investment than Emerging Markets. However, Citigroup is 1.3 times more volatile than Emerging Markets Sustainability. It trades about 0.18 of its potential returns per unit of risk. Emerging Markets Sustainability is currently generating about -0.04 per unit of risk. If you would invest 6,980 in Citigroup on September 12, 2024 and sell it today you would earn a total of 224.00 from holding Citigroup or generate 3.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Citigroup vs. Emerging Markets Sustainabilit
Performance |
| Timeline |
| Citigroup |
| Emerging Markets Sus |
Citigroup and Emerging Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Emerging Markets
The main advantage of trading using opposite Citigroup and Emerging Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Emerging Markets 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 Emerging Markets will offset losses from the drop in Emerging Markets' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Emerging Markets vs. Dfa Intl Sustainability | Emerging Markets vs. Dfa Sustainability Core | Emerging Markets vs. Dfa Investment Dimensions | Emerging Markets vs. Dfa Sustainability Targeted |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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