Correlation Between Citigroup and Genting Malaysia

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

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

Diversification Opportunities for Citigroup and Genting Malaysia

-0.91

Correlation Coefficient

Citigroup  Genting Malaysia

Pay attention - limited upside

The 3 months correlation between Citigroup and Genting is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Genting Malaysia Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genting Malaysia Bhd 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 Genting Malaysia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genting Malaysia Bhd has no effect on the direction of Citigroup i.e., Citigroup and Genting Malaysia go up and down completely randomly.

Pair Corralation between Citigroup and Genting Malaysia

Taking into account the 90-day investment horizon Citigroup is expected to generate 2.68 times less return on investment than Genting Malaysia. In addition to that, Citigroup is 1.1 times more volatile than Genting Malaysia Bhd. It trades about 0.05 of its total potential returns per unit of risk. Genting Malaysia Bhd is currently generating about 0.16 per unit of volatility. If you would invest  216.00  in Genting Malaysia Bhd on September 28, 2024 and sell it today you would earn a total of  8.00  from holding Genting Malaysia Bhd or generate 3.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

Citigroup  vs.  Genting Malaysia Bhd

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

Genting Malaysia Bhd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Genting Malaysia Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Citigroup and Genting Malaysia

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

The idea behind Citigroup and Genting Malaysia Bhd 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.

Check out your portfolio center.

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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.