Correlation Between Citigroup and HMCIB SPAC

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

By analyzing existing cross correlation between Citigroup and HMCIB SPAC 3, you can compare the effects of market volatilities on Citigroup and HMCIB SPAC 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 HMCIB SPAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and HMCIB SPAC.

Diversification Opportunities for Citigroup and HMCIB SPAC

-0.9

Correlation Coefficient

Citigroup  HMCIB SPAC

Pay attention - limited upside

The 3 months correlation between Citigroup and HMCIB is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and HMCIB SPAC 3 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HMCIB SPAC 3 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 HMCIB SPAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HMCIB SPAC 3 has no effect on the direction of Citigroup i.e., Citigroup and HMCIB SPAC go up and down completely randomly.

Pair Corralation between Citigroup and HMCIB SPAC

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.59 times more return on investment than HMCIB SPAC. However, Citigroup is 1.7 times less risky than HMCIB SPAC. It trades about 0.13 of its potential returns per unit of risk. HMCIB SPAC 3 is currently generating about -0.12 per unit of risk. If you would invest  6,205  in Citigroup on October 7, 2024 and sell it today you would earn a total of  895.00  from holding Citigroup or generate 14.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Citigroup  vs.  HMCIB SPAC 3

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

HMCIB SPAC 3

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HMCIB SPAC 3 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Citigroup and HMCIB SPAC

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

The idea behind Citigroup and HMCIB SPAC 3 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.