Correlation Between Citigroup and INFINITT Healthcare

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

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

Diversification Opportunities for Citigroup and INFINITT Healthcare

0.38

Correlation Coefficient

Citigroup  INFINITT Healthcare

Weak diversification

The 3 months correlation between Citigroup and INFINITT is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and INFINITT Healthcare Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INFINITT Healthcare 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 INFINITT Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INFINITT Healthcare has no effect on the direction of Citigroup i.e., Citigroup and INFINITT Healthcare go up and down completely randomly.

Pair Corralation between Citigroup and INFINITT Healthcare

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.09 times more return on investment than INFINITT Healthcare. However, Citigroup is 1.09 times more volatile than INFINITT Healthcare Co. It trades about 0.14 of its potential returns per unit of risk. INFINITT Healthcare Co is currently generating about 0.01 per unit of risk. If you would invest  6,042  in Citigroup on September 4, 2024 and sell it today you would earn a total of  1,100  from holding Citigroup or generate 18.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	92.19%
Values	Daily Returns

Citigroup  vs.  INFINITT Healthcare Co

Citigroup

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 11 (%) 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.

INFINITT Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INFINITT Healthcare Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, INFINITT Healthcare 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 INFINITT Healthcare

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

The idea behind Citigroup and INFINITT Healthcare Co 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.