Correlation Between Citigroup and Ultra Fund
Can any of the company-specific risk be diversified away by investing in both Citigroup and Ultra 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 Ultra Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Ultra Fund Investor, you can compare the effects of market volatilities on Citigroup and Ultra 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 Ultra Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Ultra Fund.
Diversification Opportunities for Citigroup and Ultra Fund
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Ultra is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Ultra Fund Investor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultra Fund Investor 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 Ultra Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ultra Fund Investor has no effect on the direction of Citigroup i.e., Citigroup and Ultra Fund go up and down completely randomly.
Pair Corralation between Citigroup and Ultra Fund
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.99 times more return on investment than Ultra Fund. However, Citigroup is 1.99 times more volatile than Ultra Fund Investor. It trades about 0.12 of its potential returns per unit of risk. Ultra Fund Investor is currently generating about 0.17 per unit of risk. If you would invest 6,092 in Citigroup on August 31, 2024 and sell it today you would earn a total of 924.00 from holding Citigroup or generate 15.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Ultra Fund Investor
Performance |
| Timeline |
| Citigroup |
| Ultra Fund Investor |
Citigroup and Ultra Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Ultra Fund
The main advantage of trading using opposite Citigroup and Ultra Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Ultra 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 Ultra Fund will offset losses from the drop in Ultra Fund's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Ultra Fund vs. Growth Fund Investor | Ultra Fund vs. Select Fund Investor | Ultra Fund vs. International Growth Fund | Ultra Fund vs. Heritage Fund Investor |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |