Correlation Between Citigroup and Sartorius Stedim

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

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

Diversification Opportunities for Citigroup and Sartorius Stedim

0.2

Correlation Coefficient

Citigroup  Sartorius Stedim

Modest diversification

The 3 months correlation between Citigroup and Sartorius is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Sartorius Stedim Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sartorius Stedim Biotech 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 Sartorius Stedim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sartorius Stedim Biotech has no effect on the direction of Citigroup i.e., Citigroup and Sartorius Stedim go up and down completely randomly.

Pair Corralation between Citigroup and Sartorius Stedim

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.81 times more return on investment than Sartorius Stedim. However, Citigroup is 1.24 times less risky than Sartorius Stedim. It trades about 0.28 of its potential returns per unit of risk. Sartorius Stedim Biotech is currently generating about 0.08 per unit of risk. If you would invest  6,122  in Citigroup on October 25, 2024 and sell it today you would earn a total of  2,076  from holding Citigroup or generate 33.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Citigroup  vs.  Sartorius Stedim Biotech

Citigroup

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 21 (%) 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.

Sartorius Stedim Biotech

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sartorius Stedim Biotech are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Sartorius Stedim may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Citigroup and Sartorius Stedim

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

The idea behind Citigroup and Sartorius Stedim Biotech 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.