Correlation Between Citigroup and Innovator Capital
Can any of the company-specific risk be diversified away by investing in both Citigroup and Innovator Capital 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 Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Innovator Capital Management, you can compare the effects of market volatilities on Citigroup and Innovator Capital 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 Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Innovator Capital.
Diversification Opportunities for Citigroup and Innovator Capital
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Innovator is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Innovator Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovator Capital 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 Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovator Capital has no effect on the direction of Citigroup i.e., Citigroup and Innovator Capital go up and down completely randomly.
Pair Corralation between Citigroup and Innovator Capital
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.93 times less return on investment than Innovator Capital. In addition to that, Citigroup is 1.47 times more volatile than Innovator Capital Management. It trades about 0.07 of its total potential returns per unit of risk. Innovator Capital Management is currently generating about 0.19 per unit of volatility. If you would invest 2,333 in Innovator Capital Management on August 30, 2024 and sell it today you would earn a total of 559.00 from holding Innovator Capital Management or generate 23.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 69.05% |
| Values | Daily Returns |
Citigroup vs. Innovator Capital Management
Performance |
| Timeline |
| Citigroup |
| Innovator Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Citigroup and Innovator Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Innovator Capital
The main advantage of trading using opposite Citigroup and Innovator Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Innovator Capital 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 Capital will offset losses from the drop in Innovator Capital's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Innovator Capital vs. AXS TSLA Bear | Innovator Capital vs. Direxion Shares ETF | Innovator Capital vs. Direxion Shares ETF | Innovator Capital vs. Direxion Shares ETF |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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