Correlation Between Citigroup and Innovator ETFs
Can any of the company-specific risk be diversified away by investing in both Citigroup and Innovator ETFs 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 Innovator ETFs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Innovator ETFs Trust, you can compare the effects of market volatilities on Citigroup and Innovator ETFs 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 Innovator ETFs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Innovator ETFs.
Diversification Opportunities for Citigroup and Innovator ETFs
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Innovator is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Innovator ETFs Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovator ETFs Trust 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 Innovator ETFs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovator ETFs Trust has no effect on the direction of Citigroup i.e., Citigroup and Innovator ETFs go up and down completely randomly.
Pair Corralation between Citigroup and Innovator ETFs
Taking into account the 90-day investment horizon Citigroup is expected to generate 7.58 times more return on investment than Innovator ETFs. However, Citigroup is 7.58 times more volatile than Innovator ETFs Trust. It trades about 0.22 of its potential returns per unit of risk. Innovator ETFs Trust is currently generating about 0.27 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 656.00 from holding Citigroup or generate 10.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Innovator ETFs Trust
Performance |
| Timeline |
| Citigroup |
| Innovator ETFs Trust |
Citigroup and Innovator ETFs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Innovator ETFs
The main advantage of trading using opposite Citigroup and Innovator ETFs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Innovator ETFs 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 Innovator ETFs will offset losses from the drop in Innovator ETFs' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Innovator ETFs vs. Innovator Growth Accelerated | Innovator ETFs vs. Innovator ETFs Trust | Innovator ETFs vs. Innovator ETFs Trust | Innovator ETFs vs. Innovator ETFs Trust |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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