Correlation Between Intel and Citigroup
Can any of the company-specific risk be diversified away by investing in both Intel 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 Intel and Citigroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and Citigroup, you can compare the effects of market volatilities on Intel 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 Intel with a short position of Citigroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and Citigroup.
Diversification Opportunities for Intel and Citigroup
Excellent diversification
The 3 months correlation between Intel and Citigroup is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Citigroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup and Intel 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 Intel 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 Intel i.e., Intel and Citigroup go up and down completely randomly.
Pair Corralation between Intel and Citigroup
Given the investment horizon of 90 days Intel is expected to under-perform the Citigroup. In addition to that, Intel is 1.73 times more volatile than Citigroup. It trades about -0.29 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intel vs. Citigroup
Performance |
| Timeline |
| Intel |
| Citigroup |
Intel and Citigroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and Citigroup
The main advantage of trading using opposite Intel and Citigroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel 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.| Intel vs. NVIDIA | Intel vs. Taiwan Semiconductor Manufacturing | Intel vs. Marvell Technology Group | Intel vs. Micron Technology |
| 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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