Correlation Between Citigroup and GAZTRTECHNIUADR1/5EO01

Can any of the company-specific risk be diversified away by investing in both Citigroup and GAZTRTECHNIUADR1/5EO01 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 GAZTRTECHNIUADR1/5EO01 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Citigroup and GAZTRTECHNIUADR15EO01, you can compare the effects of market volatilities on Citigroup and GAZTRTECHNIUADR1/5EO01 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 GAZTRTECHNIUADR1/5EO01. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and GAZTRTECHNIUADR1/5EO01.

Diversification Opportunities for Citigroup and GAZTRTECHNIUADR1/5EO01

0.24

Correlation Coefficient

Citigroup  GAZTRTECHNIUADR1/5EO01

Modest diversification

The 3 months correlation between Citigroup and GAZTRTECHNIUADR1/5EO01 is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and GAZTRTECHNIUADR15EO01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAZTRTECHNIUADR1/5EO01 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 GAZTRTECHNIUADR1/5EO01. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAZTRTECHNIUADR1/5EO01 has no effect on the direction of Citigroup i.e., Citigroup and GAZTRTECHNIUADR1/5EO01 go up and down completely randomly.

Pair Corralation between Citigroup and GAZTRTECHNIUADR1/5EO01

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.19 times more return on investment than GAZTRTECHNIUADR1/5EO01. However, Citigroup is 1.19 times more volatile than GAZTRTECHNIUADR15EO01. It trades about 0.14 of its potential returns per unit of risk. GAZTRTECHNIUADR15EO01 is currently generating about 0.09 per unit of risk. If you would invest  6,268  in Citigroup on October 8, 2024 and sell it today you would earn a total of  1,006  from holding Citigroup or generate 16.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.77%
Values	Daily Returns

Citigroup  vs.  GAZTRTECHNIUADR15EO01

Citigroup

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 10 (%) 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.

GAZTRTECHNIUADR1/5EO01

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GAZTRTECHNIUADR15EO01 are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, GAZTRTECHNIUADR1/5EO01 may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Citigroup and GAZTRTECHNIUADR1/5EO01

The main advantage of trading using opposite Citigroup and GAZTRTECHNIUADR1/5EO01 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, GAZTRTECHNIUADR1/5EO01 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 GAZTRTECHNIUADR1/5EO01 will offset losses from the drop in GAZTRTECHNIUADR1/5EO01's long position.

The idea behind Citigroup and GAZTRTECHNIUADR15EO01 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.