Correlation Between Citigroup and Fidus Investment
Can any of the company-specific risk be diversified away by investing in both Citigroup and Fidus Investment 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 Fidus Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Fidus Investment Corp, you can compare the effects of market volatilities on Citigroup and Fidus Investment 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 Fidus Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Fidus Investment.
Diversification Opportunities for Citigroup and Fidus Investment
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Fidus is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Fidus Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidus Investment Corp 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 Fidus Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidus Investment Corp has no effect on the direction of Citigroup i.e., Citigroup and Fidus Investment go up and down completely randomly.
Pair Corralation between Citigroup and Fidus Investment
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.4 times more return on investment than Fidus Investment. However, Citigroup is 2.4 times more volatile than Fidus Investment Corp. It trades about 0.23 of its potential returns per unit of risk. Fidus Investment Corp is currently generating about 0.36 per unit of risk. If you would invest 6,360 in Citigroup on August 27, 2024 and sell it today you would earn a total of 624.00 from holding Citigroup or generate 9.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Fidus Investment Corp
Performance |
| Timeline |
| Citigroup |
| Fidus Investment Corp |
Citigroup and Fidus Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Fidus Investment
The main advantage of trading using opposite Citigroup and Fidus Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Fidus Investment 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 Fidus Investment will offset losses from the drop in Fidus Investment's long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
| Fidus Investment vs. PowerUp Acquisition Corp | Fidus Investment vs. Aurora Innovation | Fidus Investment vs. HUMANA INC | Fidus Investment vs. Aquagold International |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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