Correlation Between Citigroup and 489570

Can any of the company-specific risk be diversified away by investing in both Citigroup and 489570 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 489570 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Citigroup and 489570, you can compare the effects of market volatilities on Citigroup and 489570 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 489570. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and 489570.

Diversification Opportunities for Citigroup and 489570

-0.04

Correlation Coefficient

Citigroup  489570

Good diversification

The 3 months correlation between Citigroup and 489570 is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and 489570 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 489570 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 489570. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 489570 has no effect on the direction of Citigroup i.e., Citigroup and 489570 go up and down completely randomly.

Pair Corralation between Citigroup and 489570

Taking into account the 90-day investment horizon Citigroup is expected to generate 23.51 times more return on investment than 489570. However, Citigroup is 23.51 times more volatile than 489570. It trades about 0.07 of its potential returns per unit of risk. 489570 is currently generating about 0.22 per unit of risk. If you would invest  4,219  in Citigroup on September 24, 2024 and sell it today you would earn a total of  2,700  from holding Citigroup or generate 64.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	9.26%
Values	Daily Returns

Citigroup  vs.  489570

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.

489570

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in 489570 are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 489570 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Citigroup and 489570

The main advantage of trading using opposite Citigroup and 489570 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, 489570 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 489570 will offset losses from the drop in 489570's long position.

The idea behind Citigroup and 489570 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.