Correlation Between Citigroup and Nationwide Mid

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

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

Diversification Opportunities for Citigroup and Nationwide Mid

0.94

Correlation Coefficient

Citigroup  Nationwide Mid

Almost no diversification

The 3 months correlation between Citigroup and Nationwide is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Nationwide Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Mid Cap 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 Nationwide Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Mid Cap has no effect on the direction of Citigroup i.e., Citigroup and Nationwide Mid go up and down completely randomly.

Pair Corralation between Citigroup and Nationwide Mid

Taking into account the 90-day investment horizon Citigroup is expected to generate 2.13 times more return on investment than Nationwide Mid. However, Citigroup is 2.13 times more volatile than Nationwide Mid Cap. It trades about 0.15 of its potential returns per unit of risk. Nationwide Mid Cap is currently generating about 0.2 per unit of risk. If you would invest  6,010  in Citigroup on September 5, 2024 and sell it today you would earn a total of  1,140  from holding Citigroup or generate 18.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Citigroup  vs.  Nationwide Mid Cap

Citigroup

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Nationwide Mid Cap

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Nationwide Mid Cap are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Nationwide Mid may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Citigroup and Nationwide Mid

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

The idea behind Citigroup and Nationwide Mid Cap 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.

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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.