Correlation Between Citigroup and Fidelity Worldwide
Can any of the company-specific risk be diversified away by investing in both Citigroup and Fidelity Worldwide 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 Worldwide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Fidelity Worldwide Fund, you can compare the effects of market volatilities on Citigroup and Fidelity Worldwide 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 Worldwide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Fidelity Worldwide.
Diversification Opportunities for Citigroup and Fidelity Worldwide
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Fidelity is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Fidelity Worldwide Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Worldwide 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 Worldwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Worldwide has no effect on the direction of Citigroup i.e., Citigroup and Fidelity Worldwide go up and down completely randomly.
Pair Corralation between Citigroup and Fidelity Worldwide
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.72 times more return on investment than Fidelity Worldwide. However, Citigroup is 1.72 times more volatile than Fidelity Worldwide Fund. It trades about 0.07 of its potential returns per unit of risk. Fidelity Worldwide Fund is currently generating about 0.07 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 | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Citigroup vs. Fidelity Worldwide Fund
Performance |
| Timeline |
| Citigroup |
| Fidelity Worldwide |
Citigroup and Fidelity Worldwide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Fidelity Worldwide
The main advantage of trading using opposite Citigroup and Fidelity Worldwide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Fidelity Worldwide 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 Worldwide will offset losses from the drop in Fidelity Worldwide's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Fidelity Worldwide vs. Fidelity Worldwide Fund | Fidelity Worldwide vs. Fidelity Worldwide Fund | Fidelity Worldwide vs. Fidelity International Small | Fidelity Worldwide vs. Fidelity International Small |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |