Correlation Between Citigroup and Fidelity Limited
Can any of the company-specific risk be diversified away by investing in both Citigroup and Fidelity Limited 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 Limited into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Fidelity Limited Term, you can compare the effects of market volatilities on Citigroup and Fidelity Limited 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 Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Fidelity Limited.
Diversification Opportunities for Citigroup and Fidelity Limited
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Fidelity is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Fidelity Limited Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Limited Term 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 Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Limited Term has no effect on the direction of Citigroup i.e., Citigroup and Fidelity Limited go up and down completely randomly.
Pair Corralation between Citigroup and Fidelity Limited
Taking into account the 90-day investment horizon Citigroup is expected to generate 14.8 times more return on investment than Fidelity Limited. However, Citigroup is 14.8 times more volatile than Fidelity Limited Term. It trades about 0.07 of its potential returns per unit of risk. Fidelity Limited Term is currently generating about 0.11 per unit of risk. If you would invest 4,206 in Citigroup on August 24, 2024 and sell it today you would earn a total of 2,778 from holding Citigroup or generate 66.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Fidelity Limited Term
Performance |
| Timeline |
| Citigroup |
| Fidelity Limited Term |
Citigroup and Fidelity Limited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Fidelity Limited
The main advantage of trading using opposite Citigroup and Fidelity Limited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Fidelity Limited 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 Limited will offset losses from the drop in Fidelity Limited's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Fidelity Limited vs. Fidelity Intermediate Municipal | Fidelity Limited vs. Fidelity Municipal Income | Fidelity Limited vs. Fidelity Tax Free Bond | Fidelity Limited vs. Fidelity Short Term Bond |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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