Correlation Between Citigroup and Fidelity Income
Can any of the company-specific risk be diversified away by investing in both Citigroup and Fidelity Income 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 Fidelity Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Fidelity Income Replacement, you can compare the effects of market volatilities on Citigroup and Fidelity Income 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 Fidelity Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Fidelity Income.
Diversification Opportunities for Citigroup and Fidelity Income
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Fidelity is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Fidelity Income Replacement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Me Replacement 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 Fidelity Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Me Replacement has no effect on the direction of Citigroup i.e., Citigroup and Fidelity Income go up and down completely randomly.
Pair Corralation between Citigroup and Fidelity Income
Taking into account the 90-day investment horizon Citigroup is expected to generate 4.65 times more return on investment than Fidelity Income. However, Citigroup is 4.65 times more volatile than Fidelity Income Replacement. It trades about 0.03 of its potential returns per unit of risk. Fidelity Income Replacement is currently generating about 0.02 per unit of risk. If you would invest 4,841 in Citigroup on January 24, 2024 and sell it today you would earn a total of 1,254 from holding Citigroup or generate 25.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Fidelity Income Replacement
Performance |
| Timeline |
| Citigroup |
| Fidelity Me Replacement |
Citigroup and Fidelity Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Fidelity Income
The main advantage of trading using opposite Citigroup and Fidelity Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Fidelity Income 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 Fidelity Income will offset losses from the drop in Fidelity Income's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Fidelity Income vs. Fidelity Freedom 2015 | Fidelity Income vs. Fidelity Puritan Fund | Fidelity Income vs. Fidelity Puritan Fund | Fidelity Income vs. Fidelity Pennsylvania Municipal |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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