Correlation Between Citigroup and Seoulin Bioscience

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

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

Diversification Opportunities for Citigroup and Seoulin Bioscience

-0.03

Correlation Coefficient

Citigroup  Seoulin Bioscience

Good diversification

The 3 months correlation between Citigroup and Seoulin is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Seoulin Bioscience CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seoulin Bioscience CoLtd 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 Seoulin Bioscience. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seoulin Bioscience CoLtd has no effect on the direction of Citigroup i.e., Citigroup and Seoulin Bioscience go up and down completely randomly.

Pair Corralation between Citigroup and Seoulin Bioscience

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.46 times more return on investment than Seoulin Bioscience. However, Citigroup is 2.17 times less risky than Seoulin Bioscience. It trades about 0.09 of its potential returns per unit of risk. Seoulin Bioscience CoLtd is currently generating about -0.01 per unit of risk. If you would invest  5,248  in Citigroup on October 7, 2024 and sell it today you would earn a total of  1,852  from holding Citigroup or generate 35.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.48%
Values	Daily Returns

Citigroup  vs.  Seoulin Bioscience CoLtd

Citigroup

Risk-Adjusted Performance

9 of 100

OK

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 unsteady fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Seoulin Bioscience CoLtd

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Seoulin Bioscience CoLtd are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Seoulin Bioscience may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Citigroup and Seoulin Bioscience

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

The idea behind Citigroup and Seoulin Bioscience CoLtd 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.