Correlation Between Citigroup and Apple
Can any of the company-specific risk be diversified away by investing in both Citigroup and Apple 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 Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Apple Inc, you can compare the effects of market volatilities on Citigroup and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Apple.
Diversification Opportunities for Citigroup and Apple
Pay attention - limited upside
The 3 months correlation between Citigroup and Apple is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Citigroup i.e., Citigroup and Apple go up and down completely randomly.
Pair Corralation between Citigroup and Apple
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.14 times more return on investment than Apple. However, Citigroup is 1.14 times more volatile than Apple Inc. It trades about 0.01 of its potential returns per unit of risk. Apple Inc is currently generating about 0.01 per unit of risk. If you would invest 6,166 in Citigroup on January 26, 2024 and sell it today you would earn a total of 13.00 from holding Citigroup or generate 0.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Apple Inc
Performance |
| Timeline |
| Citigroup |
| Apple Inc |
Citigroup and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Apple
The main advantage of trading using opposite Citigroup and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| Citigroup vs. Aquagold International | Citigroup vs. Thrivent High Yield | Citigroup vs. Morningstar Unconstrained Allocation | Citigroup vs. Via Renewables |
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.
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