Correlation Between Citigroup and Fidelity Global
Can any of the company-specific risk be diversified away by investing in both Citigroup and Fidelity Global 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 Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Fidelity Global Modity, you can compare the effects of market volatilities on Citigroup and Fidelity Global 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 Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Fidelity Global.
Diversification Opportunities for Citigroup and Fidelity Global
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citigroup and Fidelity is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Fidelity Global Modity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Global Modity 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 Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Global Modity has no effect on the direction of Citigroup i.e., Citigroup and Fidelity Global go up and down completely randomly.
Pair Corralation between Citigroup and Fidelity Global
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.88 times more return on investment than Fidelity Global. However, Citigroup is 1.88 times more volatile than Fidelity Global Modity. It trades about 0.07 of its potential returns per unit of risk. Fidelity Global Modity is currently generating about 0.01 per unit of risk. If you would invest 6,079 in Citigroup on September 1, 2024 and sell it today you would earn a total of 1,008 from holding Citigroup or generate 16.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Citigroup vs. Fidelity Global Modity
Performance |
| Timeline |
| Citigroup |
| Fidelity Global Modity |
Citigroup and Fidelity Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Fidelity Global
The main advantage of trading using opposite Citigroup and Fidelity Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Fidelity Global 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 Global will offset losses from the drop in Fidelity Global'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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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