Correlation Between Citigroup and Fidelity Equity
Can any of the company-specific risk be diversified away by investing in both Citigroup and Fidelity Equity 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 Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Fidelity Equity Premium, you can compare the effects of market volatilities on Citigroup and Fidelity Equity 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 Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Fidelity Equity.
Diversification Opportunities for Citigroup and Fidelity Equity
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Citigroup and Fidelity is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Fidelity Equity Premium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Equity Premium 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 Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Equity Premium has no effect on the direction of Citigroup i.e., Citigroup and Fidelity Equity go up and down completely randomly.
Pair Corralation between Citigroup and Fidelity Equity
Taking into account the 90-day investment horizon Citigroup is expected to generate 9.43 times less return on investment than Fidelity Equity. But when comparing it to its historical volatility, Citigroup is 3.52 times less risky than Fidelity Equity. It trades about 0.07 of its potential returns per unit of risk. Fidelity Equity Premium is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,861 in Fidelity Equity Premium on August 26, 2024 and sell it today you would earn a total of 862.00 from holding Fidelity Equity Premium or generate 46.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 8.05% |
| Values | Daily Returns |
Citigroup vs. Fidelity Equity Premium
Performance |
| Timeline |
| Citigroup |
| Fidelity Equity Premium |
Citigroup and Fidelity Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Fidelity Equity
The main advantage of trading using opposite Citigroup and Fidelity Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Fidelity Equity 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 Equity will offset losses from the drop in Fidelity Equity's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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