Correlation Between Citigroup Capital and Labor Smart

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

By analyzing existing cross correlation between Citigroup Capital XIII and Labor Smart, you can compare the effects of market volatilities on Citigroup Capital and Labor Smart 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 Capital with a short position of Labor Smart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup Capital and Labor Smart.

Diversification Opportunities for Citigroup Capital and Labor Smart

-0.85

Correlation Coefficient

Citigroup Capital  Labor Smart

Pay attention - limited upside

The 3 months correlation between Citigroup and Labor is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup Capital XIII and Labor Smart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Labor Smart and Citigroup Capital 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 Capital XIII are associated (or correlated) with Labor Smart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Labor Smart has no effect on the direction of Citigroup Capital i.e., Citigroup Capital and Labor Smart go up and down completely randomly.

Pair Corralation between Citigroup Capital and Labor Smart

Given the investment horizon of 90 days Citigroup Capital XIII is expected to generate 0.04 times more return on investment than Labor Smart. However, Citigroup Capital XIII is 23.3 times less risky than Labor Smart. It trades about 0.19 of its potential returns per unit of risk. Labor Smart is currently generating about -0.1 per unit of risk. If you would invest  2,926  in Citigroup Capital XIII on September 13, 2024 and sell it today you would earn a total of  114.00  from holding Citigroup Capital XIII or generate 3.9% return on investment over 90 days.

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

Citigroup Capital XIII  vs.  Labor Smart

Citigroup Capital XIII

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup Capital XIII are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Citigroup Capital is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Labor Smart

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Labor Smart has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Citigroup Capital and Labor Smart

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

The idea behind Citigroup Capital XIII and Labor Smart 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.