Correlation Between Citigroup and FlexShares Disciplined
Can any of the company-specific risk be diversified away by investing in both Citigroup and FlexShares Disciplined 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 FlexShares Disciplined into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and FlexShares Disciplined Duration, you can compare the effects of market volatilities on Citigroup and FlexShares Disciplined 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 FlexShares Disciplined. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and FlexShares Disciplined.
Diversification Opportunities for Citigroup and FlexShares Disciplined
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and FlexShares is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and FlexShares Disciplined Duratio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FlexShares Disciplined 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 FlexShares Disciplined. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FlexShares Disciplined has no effect on the direction of Citigroup i.e., Citigroup and FlexShares Disciplined go up and down completely randomly.
Pair Corralation between Citigroup and FlexShares Disciplined
Taking into account the 90-day investment horizon Citigroup is expected to generate 6.28 times more return on investment than FlexShares Disciplined. However, Citigroup is 6.28 times more volatile than FlexShares Disciplined Duration. It trades about 0.23 of its potential returns per unit of risk. FlexShares Disciplined Duration is currently generating about 0.19 per unit of risk. If you would invest 7,775 in Citigroup on June 6, 2025 and sell it today you would earn a total of 1,728 from holding Citigroup or generate 22.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.39% |
| Values | Daily Returns |
Citigroup vs. FlexShares Disciplined Duratio
Performance |
| Timeline |
| Citigroup |
| FlexShares Disciplined |
Citigroup and FlexShares Disciplined Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and FlexShares Disciplined
The main advantage of trading using opposite Citigroup and FlexShares Disciplined positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, FlexShares Disciplined 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 FlexShares Disciplined will offset losses from the drop in FlexShares Disciplined's long position.| Citigroup vs. Bank of America | Citigroup vs. Wells Fargo | Citigroup vs. JPMorgan Chase Co | Citigroup vs. Toronto Dominion Bank |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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