Correlation Between Citigroup and Wasatch Emerging
Can any of the company-specific risk be diversified away by investing in both Citigroup and Wasatch Emerging 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 Wasatch Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Wasatch Emerging Markets, you can compare the effects of market volatilities on Citigroup and Wasatch Emerging 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 Wasatch Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Wasatch Emerging.
Diversification Opportunities for Citigroup and Wasatch Emerging
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Wasatch is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Wasatch Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wasatch Emerging Markets 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 Wasatch Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wasatch Emerging Markets has no effect on the direction of Citigroup i.e., Citigroup and Wasatch Emerging go up and down completely randomly.
Pair Corralation between Citigroup and Wasatch Emerging
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.57 times more return on investment than Wasatch Emerging. However, Citigroup is 2.57 times more volatile than Wasatch Emerging Markets. It trades about 0.26 of its potential returns per unit of risk. Wasatch Emerging Markets is currently generating about -0.19 per unit of risk. If you would invest 6,361 in Citigroup on September 1, 2024 and sell it today you would earn a total of 726.00 from holding Citigroup or generate 11.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Citigroup vs. Wasatch Emerging Markets
Performance |
| Timeline |
| Citigroup |
| Wasatch Emerging Markets |
Citigroup and Wasatch Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Wasatch Emerging
The main advantage of trading using opposite Citigroup and Wasatch Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Wasatch Emerging 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 Wasatch Emerging will offset losses from the drop in Wasatch Emerging's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Wasatch Emerging vs. Wasatch Emerging India | Wasatch Emerging vs. Wasatch Emerging Markets | Wasatch Emerging vs. Wasatch Frontier Emerging | Wasatch Emerging vs. Wasatch Global Opportunities |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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