Correlation Between Citigroup and FT Vest
Can any of the company-specific risk be diversified away by investing in both Citigroup and FT Vest 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 FT Vest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and FT Vest NASDAQ 100, you can compare the effects of market volatilities on Citigroup and FT Vest 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 FT Vest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and FT Vest.
Diversification Opportunities for Citigroup and FT Vest
Very poor diversification
The 3 months correlation between Citigroup and QCAP is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and FT Vest NASDAQ 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FT Vest NASDAQ 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 FT Vest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FT Vest NASDAQ has no effect on the direction of Citigroup i.e., Citigroup and FT Vest go up and down completely randomly.
Pair Corralation between Citigroup and FT Vest
Taking into account the 90-day investment horizon Citigroup is expected to generate 7.04 times more return on investment than FT Vest. However, Citigroup is 7.04 times more volatile than FT Vest NASDAQ 100. It trades about 0.21 of its potential returns per unit of risk. FT Vest NASDAQ 100 is currently generating about 0.21 per unit of risk. If you would invest 6,360 in Citigroup on August 29, 2024 and sell it today you would earn a total of 615.00 from holding Citigroup or generate 9.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. FT Vest NASDAQ 100
Performance |
| Timeline |
| Citigroup |
| FT Vest NASDAQ |
Citigroup and FT Vest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and FT Vest
The main advantage of trading using opposite Citigroup and FT Vest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, FT Vest 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 FT Vest will offset losses from the drop in FT Vest's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| FT Vest vs. FT Vest Equity | FT Vest vs. Northern Lights | FT Vest vs. Dimensional International High | FT Vest vs. First Trust Exchange Traded |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |