Correlation Between Citigroup and World Growth

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

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

Diversification Opportunities for Citigroup and World Growth

0.0

Correlation Coefficient

Citigroup  World Growth

Pay attention - limited upside

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

Pair Corralation between Citigroup and World Growth

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.97 times more return on investment than World Growth. However, Citigroup is 1.97 times more volatile than World Growth Fund. It trades about 0.09 of its potential returns per unit of risk. World Growth Fund is currently generating about 0.07 per unit of risk. If you would invest  4,479  in Citigroup on October 12, 2024 and sell it today you would earn a total of  2,847  from holding Citigroup or generate 63.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Citigroup  vs.  World Growth Fund

Citigroup

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Citigroup may actually be approaching a critical reversion point that can send shares even higher in February 2025.

World Growth

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days World Growth Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Citigroup and World Growth

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

The idea behind Citigroup and World Growth Fund 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.