Correlation Between Citigroup and ARK Israel
Can any of the company-specific risk be diversified away by investing in both Citigroup and ARK Israel 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 ARK Israel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and ARK Israel Innovative, you can compare the effects of market volatilities on Citigroup and ARK Israel 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 ARK Israel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and ARK Israel.
Diversification Opportunities for Citigroup and ARK Israel
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citigroup and ARK is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and ARK Israel Innovative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARK Israel Innovative 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 ARK Israel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARK Israel Innovative has no effect on the direction of Citigroup i.e., Citigroup and ARK Israel go up and down completely randomly.
Pair Corralation between Citigroup and ARK Israel
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.42 times more return on investment than ARK Israel. However, Citigroup is 1.42 times more volatile than ARK Israel Innovative. It trades about 0.36 of its potential returns per unit of risk. ARK Israel Innovative is currently generating about 0.24 per unit of risk. If you would invest 7,039 in Citigroup on November 1, 2024 and sell it today you would earn a total of 955.00 from holding Citigroup or generate 13.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Citigroup vs. ARK Israel Innovative
Performance |
| Timeline |
| Citigroup |
| ARK Israel Innovative |
Citigroup and ARK Israel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and ARK Israel
The main advantage of trading using opposite Citigroup and ARK Israel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, ARK Israel 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 ARK Israel will offset losses from the drop in ARK Israel's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| ARK Israel vs. The 3D Printing | ARK Israel vs. ARK Autonomous Technology | ARK Israel vs. ARK Fintech Innovation | ARK Israel vs. ARK Next Generation |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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