Correlation Between Xtrackers and Citigroup
Can any of the company-specific risk be diversified away by investing in both Xtrackers 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 Xtrackers and Citigroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers II and Citigroup, you can compare the effects of market volatilities on Xtrackers 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 Xtrackers with a short position of Citigroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers and Citigroup.
Diversification Opportunities for Xtrackers and Citigroup
Pay attention - limited upside
The 3 months correlation between Xtrackers and Citigroup is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers II and Citigroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup and Xtrackers 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 Xtrackers II 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 Xtrackers i.e., Xtrackers and Citigroup go up and down completely randomly.
Pair Corralation between Xtrackers and Citigroup
Assuming the 90 days trading horizon Xtrackers is expected to generate 40.18 times less return on investment than Citigroup. But when comparing it to its historical volatility, Xtrackers II is 3.76 times less risky than Citigroup. It trades about 0.0 of its potential returns per unit of risk. Citigroup is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 4,515 in Citigroup on January 20, 2024 and sell it today you would earn a total of 1,317 from holding Citigroup or generate 29.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.63% |
| Values | Daily Returns |
Xtrackers II vs. Citigroup
Performance |
| Timeline |
| Xtrackers II |
| Citigroup |
Xtrackers and Citigroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers and Citigroup
The main advantage of trading using opposite Xtrackers and Citigroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers 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.| Xtrackers vs. Xtrackers FTSE | Xtrackers vs. Xtrackers SP 500 | Xtrackers vs. Xtrackers MSCI | Xtrackers vs. Xtrackers Stoxx |
| 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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