Correlation Between Citigroup and Fidelity New

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

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

Diversification Opportunities for Citigroup and Fidelity New

0.59

Correlation Coefficient

Citigroup  Fidelity New

Very weak diversification

The 3 months correlation between Citigroup and Fidelity is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Fidelity New Millennium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity New Millennium 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 Fidelity New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity New Millennium has no effect on the direction of Citigroup i.e., Citigroup and Fidelity New go up and down completely randomly.

Pair Corralation between Citigroup and Fidelity New

If you would invest  5,788  in Citigroup on September 14, 2024 and sell it today you would earn a total of  1,313  from holding Citigroup or generate 22.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.56%
Values	Daily Returns

Citigroup  vs.  Fidelity New Millennium

Citigroup

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 13 (%) 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.

Fidelity New Millennium

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fidelity New Millennium has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward indicators, Fidelity New is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Citigroup and Fidelity New

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

The idea behind Citigroup and Fidelity New Millennium 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.