Correlation Between Citigroup and IQ 500
Can any of the company-specific risk be diversified away by investing in both Citigroup and IQ 500 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 IQ 500 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and IQ 500 International, you can compare the effects of market volatilities on Citigroup and IQ 500 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 IQ 500. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and IQ 500.
Diversification Opportunities for Citigroup and IQ 500
Excellent diversification
The 3 months correlation between Citigroup and IQIN is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and IQ 500 International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IQ 500 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 IQ 500. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IQ 500 International has no effect on the direction of Citigroup i.e., Citigroup and IQ 500 go up and down completely randomly.
Pair Corralation between Citigroup and IQ 500
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.51 times more return on investment than IQ 500. However, Citigroup is 2.51 times more volatile than IQ 500 International. It trades about 0.29 of its potential returns per unit of risk. IQ 500 International is currently generating about -0.16 per unit of risk. If you would invest 6,122 in Citigroup on August 26, 2024 and sell it today you would earn a total of 862.00 from holding Citigroup or generate 14.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Citigroup vs. IQ 500 International
Performance |
| Timeline |
| Citigroup |
| IQ 500 International |
Citigroup and IQ 500 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and IQ 500
The main advantage of trading using opposite Citigroup and IQ 500 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, IQ 500 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 IQ 500 will offset losses from the drop in IQ 500's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| IQ 500 vs. IQ 50 Percent | IQ 500 vs. FlexShares International Quality | IQ 500 vs. Invesco SP International | IQ 500 vs. American Century Quality |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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