Correlation Between Chubb and Citigroup
Can any of the company-specific risk be diversified away by investing in both Chubb and Citigroup 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 Chubb and Citigroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chubb and Citigroup, you can compare the effects of market volatilities on Chubb and Citigroup 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 Chubb with a short position of Citigroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chubb and Citigroup.
Diversification Opportunities for Chubb and Citigroup
Pay attention - limited upside
The 3 months correlation between Chubb and Citigroup is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Chubb and Citigroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup and Chubb 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 Chubb are associated (or correlated) with Citigroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citigroup has no effect on the direction of Chubb i.e., Chubb and Citigroup go up and down completely randomly.
Pair Corralation between Chubb and Citigroup
Allowing for the 90-day total investment horizon Chubb is expected to under-perform the Citigroup. But the stock apears to be less risky and, when comparing its historical volatility, Chubb is 1.47 times less risky than Citigroup. The stock trades about -0.04 of its potential returns per unit of risk. The Citigroup is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 7,752 in Citigroup on June 10, 2025 and sell it today you would earn a total of 1,788 from holding Citigroup or generate 23.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chubb vs. Citigroup
Performance |
| Timeline |
| Chubb |
| Citigroup |
Chubb and Citigroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chubb and Citigroup
The main advantage of trading using opposite Chubb and Citigroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chubb position performs unexpectedly, Citigroup 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 Citigroup will offset losses from the drop in Citigroup's long position.| Chubb vs. Cincinnati Financial | Chubb vs. Aflac Incorporated | Chubb vs. Dover | Chubb vs. Franklin Resources |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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