Correlation Between Citigroup and Fineco AM

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

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

Diversification Opportunities for Citigroup and Fineco AM

0.66

Correlation Coefficient

Citigroup  Fineco AM

Poor diversification

The 3 months correlation between Citigroup and Fineco is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Fineco AM Pasv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fineco AM Pasv 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 Fineco AM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fineco AM Pasv has no effect on the direction of Citigroup i.e., Citigroup and Fineco AM go up and down completely randomly.

Pair Corralation between Citigroup and Fineco AM

Taking into account the 90-day investment horizon Citigroup is expected to generate 3.15 times more return on investment than Fineco AM. However, Citigroup is 3.15 times more volatile than Fineco AM Pasv. It trades about 0.03 of its potential returns per unit of risk. Fineco AM Pasv is currently generating about -0.14 per unit of risk. If you would invest  7,051  in Citigroup on December 24, 2024 and sell it today you would earn a total of  147.00  from holding Citigroup or generate 2.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.72%
Values	Daily Returns

Citigroup  vs.  Fineco AM Pasv

Citigroup

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Citigroup is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Fineco AM Pasv

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fineco AM Pasv has generated negative risk-adjusted returns adding no value to fund investors. In spite of very healthy basic indicators, Fineco AM is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Citigroup and Fineco AM

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

The idea behind Citigroup and Fineco AM Pasv 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.