Correlation Between Citigroup and Tidal ETF

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

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

Diversification Opportunities for Citigroup and Tidal ETF

0.88

Correlation Coefficient

Citigroup  Tidal ETF

Very poor diversification

The 3 months correlation between Citigroup and Tidal is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Tidal ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tidal ETF Trust 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 Tidal ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tidal ETF Trust has no effect on the direction of Citigroup i.e., Citigroup and Tidal ETF go up and down completely randomly.

Pair Corralation between Citigroup and Tidal ETF

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.99 times more return on investment than Tidal ETF. However, Citigroup is 1.99 times more volatile than Tidal ETF Trust. It trades about 0.19 of its potential returns per unit of risk. Tidal ETF Trust is currently generating about 0.15 per unit of risk. If you would invest  6,900  in Citigroup on September 18, 2024 and sell it today you would earn a total of  212.00  from holding Citigroup or generate 3.07% return on investment over 90 days.

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

Citigroup  vs.  Tidal ETF Trust

Citigroup

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 12 (%) 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.

Tidal ETF Trust

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tidal ETF Trust are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Tidal ETF is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Citigroup and Tidal ETF

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

The idea behind Citigroup and Tidal ETF Trust 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.

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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.