Correlation Between Citigroup and Regions Financial
Can any of the company-specific risk be diversified away by investing in both Citigroup and Regions Financial 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 Regions Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Regions Financial, you can compare the effects of market volatilities on Citigroup and Regions Financial 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 Regions Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Regions Financial.
Diversification Opportunities for Citigroup and Regions Financial
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Regions is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Regions Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regions Financial 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 Regions Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regions Financial has no effect on the direction of Citigroup i.e., Citigroup and Regions Financial go up and down completely randomly.
Pair Corralation between Citigroup and Regions Financial
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.78 times more return on investment than Regions Financial. However, Citigroup is 1.27 times less risky than Regions Financial. It trades about -0.05 of its potential returns per unit of risk. Regions Financial is currently generating about -0.09 per unit of risk. If you would invest 6,013 in Citigroup on January 20, 2024 and sell it today you would lose (99.00) from holding Citigroup or give up 1.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Citigroup vs. Regions Financial
Performance |
| Timeline |
| Citigroup |
| Regions Financial |
Citigroup and Regions Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Regions Financial
The main advantage of trading using opposite Citigroup and Regions Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Regions Financial 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 Regions Financial will offset losses from the drop in Regions Financial's long position.| 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |