Correlation Between Citigroup and WELLS
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By analyzing existing cross correlation between Citigroup and WELLS FARGO NEW, you can compare the effects of market volatilities on Citigroup and WELLS 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 WELLS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and WELLS.
Diversification Opportunities for Citigroup and WELLS
Pay attention - limited upside
The 3 months correlation between Citigroup and WELLS is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and WELLS FARGO NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WELLS FARGO NEW 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 WELLS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WELLS FARGO NEW has no effect on the direction of Citigroup i.e., Citigroup and WELLS go up and down completely randomly.
Pair Corralation between Citigroup and WELLS
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.26 times more return on investment than WELLS. However, Citigroup is 2.26 times more volatile than WELLS FARGO NEW. It trades about 0.21 of its potential returns per unit of risk. WELLS FARGO NEW is currently generating about 0.07 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 615.00 from holding Citigroup or generate 9.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Citigroup vs. WELLS FARGO NEW
Performance |
| Timeline |
| Citigroup |
| WELLS FARGO NEW |
Citigroup and WELLS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and WELLS
The main advantage of trading using opposite Citigroup and WELLS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, WELLS 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 WELLS will offset losses from the drop in WELLS's long position.The idea behind Citigroup and WELLS FARGO NEW pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| WELLS vs. AEP TEX INC | WELLS vs. US BANK NATIONAL | WELLS vs. Eat Beyond Global | WELLS vs. Charles Schwab Corp |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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