Correlation Between Citigroup and Ivy Managed

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

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

Diversification Opportunities for Citigroup and Ivy Managed

0.0

Correlation Coefficient

Citigroup  Ivy Managed

Pay attention - limited upside

The 3 months correlation between Citigroup and Ivy is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Ivy Managed International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivy Managed International 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 Ivy Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivy Managed International has no effect on the direction of Citigroup i.e., Citigroup and Ivy Managed go up and down completely randomly.

Pair Corralation between Citigroup and Ivy Managed

If you would invest (100.00) in Ivy Managed International on December 5, 2024 and sell it today you would earn a total of  100.00  from holding Ivy Managed International or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Citigroup  vs.  Ivy Managed International

Citigroup

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Citigroup is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Ivy Managed International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ivy Managed International has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Ivy Managed is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Citigroup and Ivy Managed

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

The idea behind Citigroup and Ivy Managed International 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.