Correlation Between Citigroup and Nasdaq-100 Fund
Can any of the company-specific risk be diversified away by investing in both Citigroup and Nasdaq-100 Fund 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 Nasdaq-100 Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Nasdaq 100 Fund Class, you can compare the effects of market volatilities on Citigroup and Nasdaq-100 Fund 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 Nasdaq-100 Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Nasdaq-100 Fund.
Diversification Opportunities for Citigroup and Nasdaq-100 Fund
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Nasdaq-100 is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Nasdaq 100 Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq 100 Fund 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 Nasdaq-100 Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq 100 Fund has no effect on the direction of Citigroup i.e., Citigroup and Nasdaq-100 Fund go up and down completely randomly.
Pair Corralation between Citigroup and Nasdaq-100 Fund
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.8 times more return on investment than Nasdaq-100 Fund. However, Citigroup is 1.8 times more volatile than Nasdaq 100 Fund Class. It trades about 0.25 of its potential returns per unit of risk. Nasdaq 100 Fund Class is currently generating about 0.09 per unit of risk. If you would invest 6,360 in Citigroup on August 28, 2024 and sell it today you would earn a total of 715.00 from holding Citigroup or generate 11.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Nasdaq 100 Fund Class
Performance |
| Timeline |
| Citigroup |
| Nasdaq 100 Fund |
Citigroup and Nasdaq-100 Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Nasdaq-100 Fund
The main advantage of trading using opposite Citigroup and Nasdaq-100 Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Nasdaq-100 Fund 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 Nasdaq-100 Fund will offset losses from the drop in Nasdaq-100 Fund's long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
| Nasdaq-100 Fund vs. Nasdaq 100 Fund Class | Nasdaq-100 Fund vs. Nasdaq 100 Fund Class | Nasdaq-100 Fund vs. Nasdaq 100 2x Strategy | Nasdaq-100 Fund vs. Dow 2x Strategy |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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