Correlation Between Citigroup and Gs Retail

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

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

Diversification Opportunities for Citigroup and Gs Retail

0.39

Correlation Coefficient

Citigroup  Gs Retail

Weak diversification

The 3 months correlation between Citigroup and 007070 is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Gs Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gs Retail 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 Gs Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gs Retail has no effect on the direction of Citigroup i.e., Citigroup and Gs Retail go up and down completely randomly.

Pair Corralation between Citigroup and Gs Retail

Taking into account the 90-day investment horizon Citigroup is expected to generate 2.73 times less return on investment than Gs Retail. But when comparing it to its historical volatility, Citigroup is 1.07 times less risky than Gs Retail. It trades about 0.19 of its potential returns per unit of risk. Gs Retail is currently generating about 0.47 of returns per unit of risk over similar time horizon. If you would invest  2,120,875  in Gs Retail on September 19, 2024 and sell it today you would earn a total of  194,125  from holding Gs Retail or generate 9.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Citigroup  vs.  Gs Retail

Citigroup

Risk-Adjusted Performance

9 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 9 (%) 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.

Gs Retail

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gs Retail are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Gs Retail is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Citigroup and Gs Retail

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

The idea behind Citigroup and Gs Retail 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.