Correlation Between Citigroup and Migdal Mutual
Can any of the company-specific risk be diversified away by investing in both Citigroup and Migdal Mutual 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 Migdal Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Migdal Mutual Funds, you can compare the effects of market volatilities on Citigroup and Migdal Mutual 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 Migdal Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Migdal Mutual.
Diversification Opportunities for Citigroup and Migdal Mutual
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Migdal is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Migdal Mutual Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Migdal Mutual Funds 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 Migdal Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Migdal Mutual Funds has no effect on the direction of Citigroup i.e., Citigroup and Migdal Mutual go up and down completely randomly.
Pair Corralation between Citigroup and Migdal Mutual
Taking into account the 90-day investment horizon Citigroup is expected to generate 3.82 times more return on investment than Migdal Mutual. However, Citigroup is 3.82 times more volatile than Migdal Mutual Funds. It trades about 0.11 of its potential returns per unit of risk. Migdal Mutual Funds is currently generating about 0.04 per unit of risk. If you would invest 4,628 in Citigroup on January 23, 2024 and sell it today you would earn a total of 1,467 from holding Citigroup or generate 31.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 80.65% |
| Values | Daily Returns |
Citigroup vs. Migdal Mutual Funds
Performance |
| Timeline |
| Citigroup |
| Migdal Mutual Funds |
Citigroup and Migdal Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Migdal Mutual
The main advantage of trading using opposite Citigroup and Migdal Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Migdal Mutual 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 Migdal Mutual will offset losses from the drop in Migdal Mutual's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Migdal Mutual vs. Migdal Mutual Funds | Migdal Mutual vs. Migdal Mutual Funds | Migdal Mutual vs. Migdal Mutual Funds | Migdal Mutual vs. Migdal Mutual Funds |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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