Correlation Between Citigroup and Wilshire International

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

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

Diversification Opportunities for Citigroup and Wilshire International

-0.1

Correlation Coefficient

Citigroup  Wilshire International

Good diversification

The 3 months correlation between Citigroup and Wilshire is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Wilshire International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilshire 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 Wilshire International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilshire International has no effect on the direction of Citigroup i.e., Citigroup and Wilshire International go up and down completely randomly.

Pair Corralation between Citigroup and Wilshire International

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.72 times less return on investment than Wilshire International. In addition to that, Citigroup is 2.27 times more volatile than Wilshire International Equity. It trades about 0.04 of its total potential returns per unit of risk. Wilshire International Equity is currently generating about 0.16 per unit of volatility. If you would invest  999.00  in Wilshire International Equity on December 27, 2024 and sell it today you would earn a total of  87.00  from holding Wilshire International Equity or generate 8.71% return on investment over 90 days.

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

Citigroup  vs.  Wilshire International Equity

Citigroup

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 3 (%) 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 newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Wilshire International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Wilshire International Equity are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Wilshire International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Citigroup and Wilshire International

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

The idea behind Citigroup and Wilshire International Equity 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.