Correlation Between Citigroup and Wisdomtree Siegel
Can any of the company-specific risk be diversified away by investing in both Citigroup and Wisdomtree Siegel 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 Wisdomtree Siegel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Wisdomtree Siegel Global, you can compare the effects of market volatilities on Citigroup and Wisdomtree Siegel 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 Wisdomtree Siegel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Wisdomtree Siegel.
Diversification Opportunities for Citigroup and Wisdomtree Siegel
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Wisdomtree is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Wisdomtree Siegel Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wisdomtree Siegel Global 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 Wisdomtree Siegel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wisdomtree Siegel Global has no effect on the direction of Citigroup i.e., Citigroup and Wisdomtree Siegel go up and down completely randomly.
Pair Corralation between Citigroup and Wisdomtree Siegel
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.89 times more return on investment than Wisdomtree Siegel. However, Citigroup is 2.89 times more volatile than Wisdomtree Siegel Global. It trades about 0.07 of its potential returns per unit of risk. Wisdomtree Siegel Global is currently generating about 0.05 per unit of risk. If you would invest 4,381 in Citigroup on August 31, 2024 and sell it today you would earn a total of 2,706 from holding Citigroup or generate 61.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 6.07% |
| Values | Daily Returns |
Citigroup vs. Wisdomtree Siegel Global
Performance |
| Timeline |
| Citigroup |
| Wisdomtree Siegel Global |
Citigroup and Wisdomtree Siegel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Wisdomtree Siegel
The main advantage of trading using opposite Citigroup and Wisdomtree Siegel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Wisdomtree Siegel 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 Wisdomtree Siegel will offset losses from the drop in Wisdomtree Siegel's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Wisdomtree Siegel vs. Vanguard Total Stock | Wisdomtree Siegel vs. Vanguard 500 Index | Wisdomtree Siegel vs. Vanguard Total Stock | Wisdomtree Siegel vs. Vanguard Total Stock |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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