Correlation Between Citigroup and WisdomTree Siegel

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

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

Diversification Opportunities for Citigroup and WisdomTree Siegel

0.95

Correlation Coefficient

Citigroup  WisdomTree Siegel

Almost no diversification

The 3 months correlation between Citigroup and WisdomTree is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and WisdomTree Siegel Moderate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Siegel 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 WisdomTree Siegel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Siegel has no effect on the direction of Citigroup i.e., Citigroup and WisdomTree Siegel go up and down completely randomly.

Pair Corralation between Citigroup and WisdomTree Siegel

Taking into account the 90-day investment horizon Citigroup is expected to generate 3.34 times more return on investment than WisdomTree Siegel. However, Citigroup is 3.34 times more volatile than WisdomTree Siegel Moderate. It trades about 0.38 of its potential returns per unit of risk. WisdomTree Siegel Moderate is currently generating about 0.27 per unit of risk. If you would invest  6,784  in Citigroup on April 30, 2025 and sell it today you would earn a total of  2,728  from holding Citigroup or generate 40.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.39%
Values	Daily Returns

Citigroup  vs.  WisdomTree Siegel Moderate

Citigroup

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

WisdomTree Siegel

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in WisdomTree Siegel Moderate are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, WisdomTree Siegel may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Citigroup and WisdomTree Siegel

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

The idea behind Citigroup and WisdomTree Siegel Moderate 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.