Correlation Between Citigroup and ITETF
Can any of the company-specific risk be diversified away by investing in both Citigroup and ITETF 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 ITETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and ITETF, you can compare the effects of market volatilities on Citigroup and ITETF 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 ITETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and ITETF.
Diversification Opportunities for Citigroup and ITETF
Average diversification
The 3 months correlation between Citigroup and ITETF is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and ITETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITETF 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 ITETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITETF has no effect on the direction of Citigroup i.e., Citigroup and ITETF go up and down completely randomly.
Pair Corralation between Citigroup and ITETF
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.34 times more return on investment than ITETF. However, Citigroup is 1.34 times more volatile than ITETF. It trades about 0.11 of its potential returns per unit of risk. ITETF is currently generating about 0.1 per unit of risk. If you would invest 4,676 in Citigroup on September 2, 2024 and sell it today you would earn a total of 2,411 from holding Citigroup or generate 51.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.58% |
| Values | Daily Returns |
Citigroup vs. ITETF
Performance |
| Timeline |
| Citigroup |
| ITETF |
Citigroup and ITETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and ITETF
The main advantage of trading using opposite Citigroup and ITETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, ITETF 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 ITETF will offset losses from the drop in ITETF's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| ITETF vs. Kingfa Science Technology | ITETF vs. GTL Limited | ITETF vs. Agro Phos India | ITETF vs. Indo Amines Limited |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |