Correlation Between Zillow Group and Citigroup
Can any of the company-specific risk be diversified away by investing in both Zillow Group and Citigroup 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 Zillow Group and Citigroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zillow Group Class and Citigroup, you can compare the effects of market volatilities on Zillow Group and Citigroup 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 Zillow Group with a short position of Citigroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zillow Group and Citigroup.
Diversification Opportunities for Zillow Group and Citigroup
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Zillow and Citigroup is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Zillow Group Class and Citigroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup and Zillow Group 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 Zillow Group Class are associated (or correlated) with Citigroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citigroup has no effect on the direction of Zillow Group i.e., Zillow Group and Citigroup go up and down completely randomly.
Pair Corralation between Zillow Group and Citigroup
Taking into account the 90-day investment horizon Zillow Group Class is expected to under-perform the Citigroup. In addition to that, Zillow Group is 1.52 times more volatile than Citigroup. It trades about -0.23 of its total potential returns per unit of risk. Citigroup is currently generating about -0.03 per unit of volatility. If you would invest 5,886 in Citigroup on January 19, 2024 and sell it today you would lose (69.00) from holding Citigroup or give up 1.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Zillow Group Class vs. Citigroup
Performance |
| Timeline |
| Zillow Group Class |
| Citigroup |
Zillow Group and Citigroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zillow Group and Citigroup
The main advantage of trading using opposite Zillow Group and Citigroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zillow Group position performs unexpectedly, Citigroup 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 Citigroup will offset losses from the drop in Citigroup's long position.| Zillow Group vs. Pinterest | Zillow Group vs. Snap Inc | Zillow Group vs. Spotify Technology SA | Zillow Group vs. Twilio Inc |
| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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