Correlation Between Citigroup and Duopharma Biotech

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

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

Diversification Opportunities for Citigroup and Duopharma Biotech

0.18

Correlation Coefficient

Citigroup  Duopharma Biotech

Average diversification

The 3 months correlation between Citigroup and Duopharma is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Duopharma Biotech Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duopharma Biotech 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 Duopharma Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duopharma Biotech Bhd has no effect on the direction of Citigroup i.e., Citigroup and Duopharma Biotech go up and down completely randomly.

Pair Corralation between Citigroup and Duopharma Biotech

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.32 times more return on investment than Duopharma Biotech. However, Citigroup is 1.32 times more volatile than Duopharma Biotech Bhd. It trades about 0.01 of its potential returns per unit of risk. Duopharma Biotech Bhd is currently generating about -0.02 per unit of risk. If you would invest  6,991  in Citigroup on December 31, 2024 and sell it today you would earn a total of  42.00  from holding Citigroup or generate 0.6% return on investment over 90 days.

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

Citigroup  vs.  Duopharma Biotech Bhd

Citigroup

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Citigroup is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Duopharma Biotech Bhd

Risk-Adjusted Performance

Very Weak

Over the last 90 days Duopharma Biotech Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Duopharma Biotech is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Citigroup and Duopharma Biotech

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

The idea behind Citigroup and Duopharma Biotech 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.

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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 CEOs Directory module to screen CEOs from public companies around the world.