Correlation Between Migdal Mutual and Citigroup

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Can any of the company-specific risk be diversified away by investing in both Migdal Mutual 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 Migdal Mutual and Citigroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Migdal Mutual Funds and Citigroup, you can compare the effects of market volatilities on Migdal Mutual 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 Migdal Mutual with a short position of Citigroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Migdal Mutual and Citigroup.

Diversification Opportunities for Migdal Mutual and Citigroup

-0.3
  Correlation Coefficient

Very good diversification

The 3 months correlation between Migdal and Citigroup is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Migdal Mutual Funds and Citigroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup and Migdal Mutual 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 Migdal Mutual Funds 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 Migdal Mutual i.e., Migdal Mutual and Citigroup go up and down completely randomly.

Pair Corralation between Migdal Mutual and Citigroup

Assuming the 90 days trading horizon Migdal Mutual Funds is expected to under-perform the Citigroup. But the etf apears to be less risky and, when comparing its historical volatility, Migdal Mutual Funds is 12.03 times less risky than Citigroup. The etf trades about -0.54 of its potential returns per unit of risk. The Citigroup is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  6,166  in Citigroup on January 26, 2024 and sell it today you would earn a total of  81.00  from holding Citigroup or generate 1.31% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy76.19%
ValuesDaily Returns

Migdal Mutual Funds  vs.  Citigroup

 Performance 
       Timeline  
Migdal Mutual Funds 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Migdal Mutual Funds has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Migdal Mutual is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Citigroup 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Migdal Mutual and Citigroup Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Migdal Mutual and Citigroup

The main advantage of trading using opposite Migdal Mutual and Citigroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Migdal Mutual 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.
The idea behind Migdal Mutual Funds and Citigroup pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.

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