Correlation Between Citigroup and NAV
Can any of the company-specific risk be diversified away by investing in both Citigroup and NAV 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 NAV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and NAV, you can compare the effects of market volatilities on Citigroup and NAV 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 NAV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and NAV.
Diversification Opportunities for Citigroup and NAV
Pay attention - limited upside
The 3 months correlation between Citigroup and NAV is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and NAV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NAV 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 NAV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NAV has no effect on the direction of Citigroup i.e., Citigroup and NAV go up and down completely randomly.
Pair Corralation between Citigroup and NAV
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.38 times more return on investment than NAV. However, Citigroup is 2.61 times less risky than NAV. It trades about 0.23 of its potential returns per unit of risk. NAV is currently generating about -0.07 per unit of risk. If you would invest 6,360 in Citigroup on August 27, 2024 and sell it today you would earn a total of 624.00 from holding Citigroup or generate 9.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. NAV
Performance |
| Timeline |
| Citigroup |
| NAV |
Citigroup and NAV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and NAV
The main advantage of trading using opposite Citigroup and NAV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, NAV 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 NAV will offset losses from the drop in NAV's long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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