Correlation Between Citigroup and Nordnet One

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

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

Diversification Opportunities for Citigroup and Nordnet One

0.76

Correlation Coefficient

Citigroup  Nordnet One

Poor diversification

The 3 months correlation between Citigroup and Nordnet is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Nordnet One Forsiktig in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordnet One Forsiktig 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 Nordnet One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordnet One Forsiktig has no effect on the direction of Citigroup i.e., Citigroup and Nordnet One go up and down completely randomly.

Pair Corralation between Citigroup and Nordnet One

Taking into account the 90-day investment horizon Citigroup is expected to generate 9.03 times more return on investment than Nordnet One. However, Citigroup is 9.03 times more volatile than Nordnet One Forsiktig. It trades about 0.18 of its potential returns per unit of risk. Nordnet One Forsiktig is currently generating about 0.21 per unit of risk. If you would invest  5,788  in Citigroup on September 15, 2024 and sell it today you would earn a total of  1,313  from holding Citigroup or generate 22.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Citigroup  vs.  Nordnet One Forsiktig

Citigroup

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 13 (%) 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.

Nordnet One Forsiktig

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Nordnet One Forsiktig are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. Even with relatively invariable basic indicators, Nordnet One is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Citigroup and Nordnet One

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

The idea behind Citigroup and Nordnet One Forsiktig 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.