Correlation Between Citigroup and Fubon NIFTY

Can any of the company-specific risk be diversified away by investing in both Citigroup and Fubon NIFTY 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 Fubon NIFTY into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Citigroup and Fubon NIFTY, you can compare the effects of market volatilities on Citigroup and Fubon NIFTY 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 Fubon NIFTY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Fubon NIFTY.

Diversification Opportunities for Citigroup and Fubon NIFTY

-0.53

Correlation Coefficient

Citigroup  Fubon NIFTY

Excellent diversification

The 3 months correlation between Citigroup and Fubon is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Fubon NIFTY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fubon NIFTY 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 Fubon NIFTY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fubon NIFTY has no effect on the direction of Citigroup i.e., Citigroup and Fubon NIFTY go up and down completely randomly.

Pair Corralation between Citigroup and Fubon NIFTY

Taking into account the 90-day investment horizon Citigroup is expected to generate 2.03 times more return on investment than Fubon NIFTY. However, Citigroup is 2.03 times more volatile than Fubon NIFTY. It trades about 0.24 of its potential returns per unit of risk. Fubon NIFTY is currently generating about -0.13 per unit of risk. If you would invest  6,129  in Citigroup on October 20, 2024 and sell it today you would earn a total of  1,870  from holding Citigroup or generate 30.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.88%
Values	Daily Returns

Citigroup  vs.  Fubon NIFTY

Citigroup

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Fubon NIFTY

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fubon NIFTY has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Etf's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the exchange-traded fund private investors.

Pair Trading with Citigroup and Fubon NIFTY

The main advantage of trading using opposite Citigroup and Fubon NIFTY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Fubon NIFTY 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 Fubon NIFTY will offset losses from the drop in Fubon NIFTY's long position.

The idea behind Citigroup and Fubon NIFTY 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.

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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.