Correlation Between Citigroup and Sysage Technology

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

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

Diversification Opportunities for Citigroup and Sysage Technology

0.44

Correlation Coefficient

Citigroup  Sysage Technology

Very weak diversification

The 3 months correlation between Citigroup and Sysage is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Sysage Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sysage Technology 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 Sysage Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sysage Technology has no effect on the direction of Citigroup i.e., Citigroup and Sysage Technology go up and down completely randomly.

Pair Corralation between Citigroup and Sysage Technology

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.63 times more return on investment than Sysage Technology. However, Citigroup is 1.59 times less risky than Sysage Technology. It trades about 0.11 of its potential returns per unit of risk. Sysage Technology Co is currently generating about -0.02 per unit of risk. If you would invest  4,325  in Citigroup on September 23, 2024 and sell it today you would earn a total of  2,594  from holding Citigroup or generate 59.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.15%
Values	Daily Returns

Citigroup  vs.  Sysage Technology Co

Citigroup

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Citigroup may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Sysage Technology

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sysage Technology Co are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Sysage Technology may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Citigroup and Sysage Technology

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

The idea behind Citigroup and Sysage Technology Co 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.