Correlation Between Citigroup and Emerging Europe
Can any of the company-specific risk be diversified away by investing in both Citigroup and Emerging Europe 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 Europe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Emerging Europe Fund, you can compare the effects of market volatilities on Citigroup and Emerging Europe 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 Europe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Emerging Europe.
Diversification Opportunities for Citigroup and Emerging Europe
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Emerging is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Emerging Europe Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Europe 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 Europe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Europe has no effect on the direction of Citigroup i.e., Citigroup and Emerging Europe go up and down completely randomly.
Pair Corralation between Citigroup and Emerging Europe
If you would invest 6,412 in Citigroup on August 30, 2024 and sell it today you would earn a total of 604.00 from holding Citigroup or generate 9.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 4.35% |
| Values | Daily Returns |
Citigroup vs. Emerging Europe Fund
Performance |
| Timeline |
| Citigroup |
| Emerging Europe |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Citigroup and Emerging Europe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Emerging Europe
The main advantage of trading using opposite Citigroup and Emerging Europe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Emerging Europe 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 Europe will offset losses from the drop in Emerging Europe's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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