Correlation Between Citigroup and Discipline Fund
Can any of the company-specific risk be diversified away by investing in both Citigroup and Discipline Fund 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 Discipline Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Discipline Fund ETF, you can compare the effects of market volatilities on Citigroup and Discipline Fund 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 Discipline Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Discipline Fund.
Diversification Opportunities for Citigroup and Discipline Fund
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and Discipline is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Discipline Fund ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Discipline Fund ETF 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 Discipline Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Discipline Fund ETF has no effect on the direction of Citigroup i.e., Citigroup and Discipline Fund go up and down completely randomly.
Pair Corralation between Citigroup and Discipline Fund
Taking into account the 90-day investment horizon Citigroup is expected to generate 5.31 times more return on investment than Discipline Fund. However, Citigroup is 5.31 times more volatile than Discipline Fund ETF. It trades about 0.09 of its potential returns per unit of risk. Discipline Fund ETF is currently generating about 0.08 per unit of risk. If you would invest 5,896 in Citigroup on September 13, 2024 and sell it today you would earn a total of 1,277 from holding Citigroup or generate 21.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Discipline Fund ETF
Performance |
| Timeline |
| Citigroup |
| Discipline Fund ETF |
Citigroup and Discipline Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Discipline Fund
The main advantage of trading using opposite Citigroup and Discipline Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Discipline Fund 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 Discipline Fund will offset losses from the drop in Discipline Fund's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Discipline Fund vs. ATAC Rotation ETF | Discipline Fund vs. Amplify BlackSwan ISWN | Discipline Fund vs. Tidal ETF Trust | Discipline Fund vs. Aptus Defined Risk |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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