Correlation Between Citigroup and ZSPY
Can any of the company-specific risk be diversified away by investing in both Citigroup and ZSPY 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 ZSPY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and ZSPY, you can compare the effects of market volatilities on Citigroup and ZSPY 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 ZSPY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and ZSPY.
Diversification Opportunities for Citigroup and ZSPY
Very poor diversification
The 3 months correlation between Citigroup and ZSPY is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and ZSPY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZSPY 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 ZSPY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZSPY has no effect on the direction of Citigroup i.e., Citigroup and ZSPY go up and down completely randomly.
Pair Corralation between Citigroup and ZSPY
If you would invest 6,980 in Citigroup on September 12, 2024 and sell it today you would earn a total of 216.00 from holding Citigroup or generate 3.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 9.09% |
| Values | Daily Returns |
Citigroup vs. ZSPY
Performance |
| Timeline |
| Citigroup |
| ZSPY |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Citigroup and ZSPY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and ZSPY
The main advantage of trading using opposite Citigroup and ZSPY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, ZSPY 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 ZSPY will offset losses from the drop in ZSPY's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| ZSPY vs. Vanguard Total Stock | ZSPY vs. SPDR SP 500 | ZSPY vs. iShares Core SP | ZSPY vs. Vanguard Total Bond |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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