Correlation Between Citigroup and MicroSectors FANG
Can any of the company-specific risk be diversified away by investing in both Citigroup and MicroSectors FANG 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 MicroSectors FANG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and MicroSectors FANG Index, you can compare the effects of market volatilities on Citigroup and MicroSectors FANG 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 MicroSectors FANG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and MicroSectors FANG.
Diversification Opportunities for Citigroup and MicroSectors FANG
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Citigroup and MicroSectors is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and MicroSectors FANG Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MicroSectors FANG Index 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 MicroSectors FANG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MicroSectors FANG Index has no effect on the direction of Citigroup i.e., Citigroup and MicroSectors FANG go up and down completely randomly.
Pair Corralation between Citigroup and MicroSectors FANG
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.39 times more return on investment than MicroSectors FANG. However, Citigroup is 2.56 times less risky than MicroSectors FANG. It trades about 0.14 of its potential returns per unit of risk. MicroSectors FANG Index is currently generating about 0.03 per unit of risk. If you would invest 10,239 in Citigroup on September 23, 2025 and sell it today you would earn a total of 1,402 from holding Citigroup or generate 13.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.46% |
| Values | Daily Returns |
Citigroup vs. MicroSectors FANG Index
Performance |
| Timeline |
| Citigroup |
| MicroSectors FANG Index |
Citigroup and MicroSectors FANG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and MicroSectors FANG
The main advantage of trading using opposite Citigroup and MicroSectors FANG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, MicroSectors FANG 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 MicroSectors FANG will offset losses from the drop in MicroSectors FANG's long position.| Citigroup vs. Mitsubishi UFJ Financial | Citigroup vs. Royal Bank of | Citigroup vs. Wells Fargo | Citigroup vs. Bank of America |
| MicroSectors FANG vs. Capital Group Core | MicroSectors FANG vs. iShares Core Growth | MicroSectors FANG vs. iShares Dow Jones | MicroSectors FANG vs. iShares Russell Top |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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