Correlation Between Citigroup and WisdomTree International

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Citigroup and WisdomTree International 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 WisdomTree International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and WisdomTree International Quality, you can compare the effects of market volatilities on Citigroup and WisdomTree International 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 WisdomTree International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and WisdomTree International.

Diversification Opportunities for Citigroup and WisdomTree International

-0.71
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Citigroup and WisdomTree is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and WisdomTree International Quali in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree International 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 WisdomTree International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree International has no effect on the direction of Citigroup i.e., Citigroup and WisdomTree International go up and down completely randomly.

Pair Corralation between Citigroup and WisdomTree International

Taking into account the 90-day investment horizon Citigroup is expected to generate 2.37 times more return on investment than WisdomTree International. However, Citigroup is 2.37 times more volatile than WisdomTree International Quality. It trades about 0.21 of its potential returns per unit of risk. WisdomTree International Quality is currently generating about -0.25 per unit of risk. If you would invest  6,255  in Citigroup on August 24, 2024 and sell it today you would earn a total of  640.00  from holding Citigroup or generate 10.23% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Citigroup  vs.  WisdomTree International Quali

 Performance 
       Timeline  
Citigroup 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.
WisdomTree International 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days WisdomTree International Quality has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Etf's fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the Exchange Traded Fund stockholders.

Citigroup and WisdomTree International Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Citigroup and WisdomTree International

The main advantage of trading using opposite Citigroup and WisdomTree International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, WisdomTree International 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 WisdomTree International will offset losses from the drop in WisdomTree International's long position.
The idea behind Citigroup and WisdomTree International Quality pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

Other Complementary Tools

Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
ETFs
Find actively traded Exchange Traded Funds (ETF) from around the world
Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital
USA ETFs
Find actively traded Exchange Traded Funds (ETF) in USA
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios