Correlation Between Citigroup and Agile Content

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

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

Diversification Opportunities for Citigroup and Agile Content

-0.53

Correlation Coefficient

Citigroup  Agile Content

Excellent diversification

The 3 months correlation between Citigroup and Agile is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Agile Content SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agile Content SA 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 Agile Content. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agile Content SA has no effect on the direction of Citigroup i.e., Citigroup and Agile Content go up and down completely randomly.

Pair Corralation between Citigroup and Agile Content

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.67 times more return on investment than Agile Content. However, Citigroup is 1.48 times less risky than Agile Content. It trades about 0.09 of its potential returns per unit of risk. Agile Content SA is currently generating about 0.0 per unit of risk. If you would invest  5,021  in Citigroup on October 7, 2024 and sell it today you would earn a total of  2,079  from holding Citigroup or generate 41.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Citigroup  vs.  Agile Content SA

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

Agile Content SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Agile Content SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Citigroup and Agile Content

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

The idea behind Citigroup and Agile Content SA 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.