Correlation Between Citigroup and Fidelity Freedom
Can any of the company-specific risk be diversified away by investing in both Citigroup and Fidelity Freedom 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 Freedom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Fidelity Freedom 2050, you can compare the effects of market volatilities on Citigroup and Fidelity Freedom 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 Freedom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Fidelity Freedom.
Diversification Opportunities for Citigroup and Fidelity Freedom
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Citigroup and Fidelity is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Fidelity Freedom 2050 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Freedom 2050 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 Freedom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Freedom 2050 has no effect on the direction of Citigroup i.e., Citigroup and Fidelity Freedom go up and down completely randomly.
Pair Corralation between Citigroup and Fidelity Freedom
Taking into account the 90-day investment horizon Citigroup is expected to under-perform the Fidelity Freedom. In addition to that, Citigroup is 1.66 times more volatile than Fidelity Freedom 2050. It trades about -0.09 of its total potential returns per unit of risk. Fidelity Freedom 2050 is currently generating about -0.12 per unit of volatility. If you would invest 1,396 in Fidelity Freedom 2050 on January 14, 2025 and sell it today you would lose (89.00) from holding Fidelity Freedom 2050 or give up 6.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Citigroup vs. Fidelity Freedom 2050
Performance |
| Timeline |
| Citigroup |
| Fidelity Freedom 2050 |
Citigroup and Fidelity Freedom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Fidelity Freedom
The main advantage of trading using opposite Citigroup and Fidelity Freedom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Fidelity Freedom 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 Freedom will offset losses from the drop in Fidelity Freedom's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. Bank of America |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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