Correlation Between Citigroup and Ivy Natural
Can any of the company-specific risk be diversified away by investing in both Citigroup and Ivy Natural 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 Ivy Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Ivy Natural Resources, you can compare the effects of market volatilities on Citigroup and Ivy Natural 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 Ivy Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Ivy Natural.
Diversification Opportunities for Citigroup and Ivy Natural
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Ivy is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Ivy Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivy Natural Resources 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 Ivy Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivy Natural Resources has no effect on the direction of Citigroup i.e., Citigroup and Ivy Natural go up and down completely randomly.
Pair Corralation between Citigroup and Ivy Natural
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.38 times more return on investment than Ivy Natural. However, Citigroup is 1.38 times more volatile than Ivy Natural Resources. It trades about 0.06 of its potential returns per unit of risk. Ivy Natural Resources is currently generating about -0.01 per unit of risk. If you would invest 4,636 in Citigroup on October 7, 2024 and sell it today you would earn a total of 2,464 from holding Citigroup or generate 53.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Ivy Natural Resources
Performance |
| Timeline |
| Citigroup |
| Ivy Natural Resources |
Citigroup and Ivy Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Ivy Natural
The main advantage of trading using opposite Citigroup and Ivy Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Ivy Natural 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 Ivy Natural will offset losses from the drop in Ivy Natural'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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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