Correlation Between Citigroup and Fidelity Balanced
Can any of the company-specific risk be diversified away by investing in both Citigroup and Fidelity Balanced 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 Fidelity Balanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Fidelity Balanced Fund, you can compare the effects of market volatilities on Citigroup and Fidelity Balanced 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 Fidelity Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Fidelity Balanced.
Diversification Opportunities for Citigroup and Fidelity Balanced
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Fidelity is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Fidelity Balanced Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Balanced 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 Fidelity Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Balanced has no effect on the direction of Citigroup i.e., Citigroup and Fidelity Balanced go up and down completely randomly.
Pair Corralation between Citigroup and Fidelity Balanced
Taking into account the 90-day investment horizon Citigroup is expected to generate 4.22 times more return on investment than Fidelity Balanced. However, Citigroup is 4.22 times more volatile than Fidelity Balanced Fund. It trades about 0.26 of its potential returns per unit of risk. Fidelity Balanced Fund is currently generating about 0.4 per unit of risk. If you would invest 6,361 in Citigroup on September 1, 2024 and sell it today you would earn a total of 726.00 from holding Citigroup or generate 11.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Fidelity Balanced Fund
Performance |
| Timeline |
| Citigroup |
| Fidelity Balanced |
Citigroup and Fidelity Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Fidelity Balanced
The main advantage of trading using opposite Citigroup and Fidelity Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Fidelity Balanced 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 Fidelity Balanced will offset losses from the drop in Fidelity Balanced's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Fidelity Balanced vs. Fidelity Puritan Fund | Fidelity Balanced vs. Fidelity Low Priced Stock | Fidelity Balanced vs. Fidelity International Discovery | Fidelity Balanced vs. Fidelity Contrafund |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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