Correlation Between Citigroup and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Citigroup and Dow Jones 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 Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Dow Jones Islamic, you can compare the effects of market volatilities on Citigroup and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Dow Jones.
Diversification Opportunities for Citigroup and Dow Jones
Average diversification
The 3 months correlation between Citigroup and Dow is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Dow Jones Islamic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Islamic 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Islamic has no effect on the direction of Citigroup i.e., Citigroup and Dow Jones go up and down completely randomly.
Pair Corralation between Citigroup and Dow Jones
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.79 times more return on investment than Dow Jones. However, Citigroup is 1.79 times more volatile than Dow Jones Islamic. It trades about -0.04 of its potential returns per unit of risk. Dow Jones Islamic is currently generating about -0.17 per unit of risk. If you would invest 8,130 in Citigroup on December 1, 2024 and sell it today you would lose (135.00) from holding Citigroup or give up 1.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Citigroup vs. Dow Jones Islamic
Performance |
| Timeline |
Citigroup and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Citigroup
Pair trading matchups for Citigroup
Dow Jones Islamic
Pair trading matchups for Dow Jones
Pair Trading with Citigroup and Dow Jones
The main advantage of trading using opposite Citigroup and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Dow Jones vs. National Vision Holdings | Dow Jones vs. Sony Group Corp | Dow Jones vs. Sonida Senior Living | Dow Jones vs. Funko Inc |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| 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 |