Correlation Between Citigroup and MEITAV INVESTMENTS

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

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

Diversification Opportunities for Citigroup and MEITAV INVESTMENTS

0.86

Correlation Coefficient

Citigroup  MEITAV INVESTMENTS

Very poor diversification

The 3 months correlation between Citigroup and MEITAV is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and MEITAV INVESTMENTS HOUSE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEITAV INVESTMENTS HOUSE 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 MEITAV INVESTMENTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEITAV INVESTMENTS HOUSE has no effect on the direction of Citigroup i.e., Citigroup and MEITAV INVESTMENTS go up and down completely randomly.

Pair Corralation between Citigroup and MEITAV INVESTMENTS

Taking into account the 90-day investment horizon Citigroup is expected to generate 9.21 times less return on investment than MEITAV INVESTMENTS. But when comparing it to its historical volatility, Citigroup is 4.09 times less risky than MEITAV INVESTMENTS. It trades about 0.25 of its potential returns per unit of risk. MEITAV INVESTMENTS HOUSE is currently generating about 0.57 of returns per unit of risk over similar time horizon. If you would invest  211,995  in MEITAV INVESTMENTS HOUSE on September 15, 2024 and sell it today you would earn a total of  79,505  from holding MEITAV INVESTMENTS HOUSE or generate 37.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	85.71%
Values	Daily Returns

Citigroup  vs.  MEITAV INVESTMENTS HOUSE

Citigroup

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 13 (%) 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.

MEITAV INVESTMENTS HOUSE

Risk-Adjusted Performance

33 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in MEITAV INVESTMENTS HOUSE are ranked lower than 33 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, MEITAV INVESTMENTS sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and MEITAV INVESTMENTS

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

The idea behind Citigroup and MEITAV INVESTMENTS HOUSE 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 Transaction History module to view history of all your transactions and understand their impact on performance.