Correlation Between Citigroup and Isabella Bank
Can any of the company-specific risk be diversified away by investing in both Citigroup and Isabella Bank 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 Isabella Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Isabella Bank, you can compare the effects of market volatilities on Citigroup and Isabella Bank 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 Isabella Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Isabella Bank.
Diversification Opportunities for Citigroup and Isabella Bank
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Citigroup and Isabella is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Isabella Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Isabella Bank 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 Isabella Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Isabella Bank has no effect on the direction of Citigroup i.e., Citigroup and Isabella Bank go up and down completely randomly.
Pair Corralation between Citigroup and Isabella Bank
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.39 times more return on investment than Isabella Bank. However, Citigroup is 1.39 times more volatile than Isabella Bank. It trades about -0.08 of its potential returns per unit of risk. Isabella Bank is currently generating about -0.24 per unit of risk. If you would invest 8,051 in Citigroup on November 28, 2024 and sell it today you would lose (237.00) from holding Citigroup or give up 2.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Isabella Bank
Performance |
| Timeline |
| Citigroup |
| Isabella Bank |
Citigroup and Isabella Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Isabella Bank
The main advantage of trading using opposite Citigroup and Isabella Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Isabella Bank 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 Isabella Bank will offset losses from the drop in Isabella Bank's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Isabella Bank vs. Home Federal Bancorp | Isabella Bank vs. Magyar Bancorp | Isabella Bank vs. ChoiceOne Financial Services | Isabella Bank vs. Heritage Commerce Corp |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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