Correlation Between Citigroup and Fidelity Japan
Can any of the company-specific risk be diversified away by investing in both Citigroup and Fidelity Japan 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 Japan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Fidelity Japan Fund, you can compare the effects of market volatilities on Citigroup and Fidelity Japan 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 Japan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Fidelity Japan.
Diversification Opportunities for Citigroup and Fidelity Japan
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Fidelity is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Fidelity Japan Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Japan 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 Japan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Japan has no effect on the direction of Citigroup i.e., Citigroup and Fidelity Japan go up and down completely randomly.
Pair Corralation between Citigroup and Fidelity Japan
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.28 times more return on investment than Fidelity Japan. However, Citigroup is 2.28 times more volatile than Fidelity Japan Fund. It trades about 0.26 of its potential returns per unit of risk. Fidelity Japan Fund is currently generating about 0.09 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 Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Citigroup vs. Fidelity Japan Fund
Performance |
| Timeline |
| Citigroup |
| Fidelity Japan |
Citigroup and Fidelity Japan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Fidelity Japan
The main advantage of trading using opposite Citigroup and Fidelity Japan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Fidelity Japan 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 Japan will offset losses from the drop in Fidelity Japan's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Fidelity Japan vs. Fidelity Japan Smaller | Fidelity Japan vs. Fidelity Europe Fund | Fidelity Japan vs. Fidelity Pacific Basin | Fidelity Japan vs. Fidelity Emerging Asia |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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