Correlation Between Citigroup and International Growth
Can any of the company-specific risk be diversified away by investing in both Citigroup and International Growth 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 International Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and International Growth Fund, you can compare the effects of market volatilities on Citigroup and International Growth 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 International Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and International Growth.
Diversification Opportunities for Citigroup and International Growth
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and International is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and International Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Growth 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 International Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Growth has no effect on the direction of Citigroup i.e., Citigroup and International Growth go up and down completely randomly.
Pair Corralation between Citigroup and International Growth
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.9 times more return on investment than International Growth. However, Citigroup is 2.9 times more volatile than International Growth Fund. It trades about 0.21 of its potential returns per unit of risk. International Growth Fund is currently generating about -0.19 per unit of risk. If you would invest 6,255 in Citigroup on August 24, 2024 and sell it today you would earn a total of 640.00 from holding Citigroup or generate 10.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. International Growth Fund
Performance |
| Timeline |
| Citigroup |
| International Growth |
Citigroup and International Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and International Growth
The main advantage of trading using opposite Citigroup and International Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, International Growth 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 International Growth will offset losses from the drop in International Growth's long position.| Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Royal Bank of | Citigroup vs. JPMorgan Chase Co |
| International Growth vs. Europacific Growth Fund | International Growth vs. HUMANA INC | International Growth vs. Aquagold International | International Growth vs. Barloworld Ltd ADR |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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