Correlation Between ING Groep and Citigroup

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Can any of the company-specific risk be diversified away by investing in both ING Groep 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 ING Groep and Citigroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ING Groep NV and Citigroup, you can compare the effects of market volatilities on ING Groep 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 ING Groep with a short position of Citigroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of ING Groep and Citigroup.

Diversification Opportunities for ING Groep and Citigroup

0.2
  Correlation Coefficient

Modest diversification

The 3 months correlation between ING Groep and Citigroup is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding ING Groep NV and Citigroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup and ING Groep 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 ING Groep NV 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 ING Groep i.e., ING Groep and Citigroup go up and down completely randomly.

Pair Corralation between ING Groep and Citigroup

Considering the 90-day investment horizon ING Groep NV is expected to generate 1.11 times more return on investment than Citigroup. However, ING Groep is 1.11 times more volatile than Citigroup. It trades about 0.06 of its potential returns per unit of risk. Citigroup is currently generating about -0.09 per unit of risk. If you would invest  957.00  in ING Groep NV on March 28, 2022 and sell it today you would earn a total of  79.00  from holding ING Groep NV or generate 8.25% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

ING Groep NV  vs.  Citigroup

 Performance (%) 
      Timeline 
ING Groep NV 
ING Groep Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in ING Groep NV are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, ING Groep may actually be approaching a critical reversion point that can send shares even higher in July 2022.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0973
Payout Ratio
0.0311
Last Split Factor
2:1
Forward Annual Dividend Rate
0.98
Dividend Date
2022-05-25
Ex Dividend Date
2022-05-13
Last Split Date
2001-07-13

ING Groep Price Channel

Citigroup 
Citigroup Performance
0 of 100
Over the last 90 days Citigroup has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in July 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0439
Payout Ratio
0.24
Last Split Factor
1:10
Forward Annual Dividend Rate
2.04
Dividend Date
2022-05-27
Ex Dividend Date
2022-04-29
Last Split Date
2011-05-09

Citigroup Price Channel

ING Groep and Citigroup Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with ING Groep and Citigroup

The main advantage of trading using opposite ING Groep and Citigroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ING Groep 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.
The idea behind ING Groep NV and Citigroup 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.

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