Correlation Between Citigroup and Zurich Insurance
Can any of the company-specific risk be diversified away by investing in both Citigroup and Zurich Insurance 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 Zurich Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Zurich Insurance Group, you can compare the effects of market volatilities on Citigroup and Zurich Insurance 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 Zurich Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Zurich Insurance.
Diversification Opportunities for Citigroup and Zurich Insurance
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Citigroup and Zurich is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Zurich Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zurich Insurance 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 Zurich Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zurich Insurance has no effect on the direction of Citigroup i.e., Citigroup and Zurich Insurance go up and down completely randomly.
Pair Corralation between Citigroup and Zurich Insurance
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.82 times more return on investment than Zurich Insurance. However, Citigroup is 2.82 times more volatile than Zurich Insurance Group. It trades about 0.21 of its potential returns per unit of risk. Zurich Insurance Group is currently generating about 0.02 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 Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Citigroup vs. Zurich Insurance Group
Performance |
| Timeline |
| Citigroup |
| Zurich Insurance |
Citigroup and Zurich Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Zurich Insurance
The main advantage of trading using opposite Citigroup and Zurich Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Zurich Insurance 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 Zurich Insurance will offset losses from the drop in Zurich Insurance's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Zurich Insurance vs. Assicurazioni Generali SpA | Zurich Insurance vs. ageas SANV | Zurich Insurance vs. AXA SA | Zurich Insurance vs. Sampo OYJ |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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