Correlation Between Citigroup and Global X
Can any of the company-specific risk be diversified away by investing in both Citigroup and Global X 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 Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Global X MSCI, you can compare the effects of market volatilities on Citigroup and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Global X.
Diversification Opportunities for Citigroup and Global X
Good diversification
The 3 months correlation between Citigroup and Global is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Global X MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X MSCI 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X MSCI has no effect on the direction of Citigroup i.e., Citigroup and Global X go up and down completely randomly.
Pair Corralation between Citigroup and Global X
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.38 times more return on investment than Global X. However, Citigroup is 1.38 times more volatile than Global X MSCI. It trades about 0.06 of its potential returns per unit of risk. Global X MSCI is currently generating about 0.03 per unit of risk. If you would invest 4,733 in Citigroup on August 27, 2024 and sell it today you would earn a total of 2,251 from holding Citigroup or generate 47.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Global X MSCI
Performance |
| Timeline |
| Citigroup |
| Global X MSCI |
Citigroup and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Global X
The main advantage of trading using opposite Citigroup and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
| Global X vs. iShares MSCI Hong | Global X vs. HUMANA INC | Global X vs. SCOR PK | Global X vs. Aquagold International |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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