Correlation Between Citigroup and Adomos SA

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

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

Diversification Opportunities for Citigroup and Adomos SA

-0.19

Correlation Coefficient

Citigroup  Adomos SA

Good diversification

The 3 months correlation between Citigroup and Adomos is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Adomos SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adomos 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 Adomos SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adomos SA has no effect on the direction of Citigroup i.e., Citigroup and Adomos SA go up and down completely randomly.

Pair Corralation between Citigroup and Adomos SA

If you would invest  0.02  in Adomos SA on September 25, 2024 and sell it today you would earn a total of  0.00  from holding Adomos SA or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Citigroup  vs.  Adomos SA

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

Adomos SA

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Adomos SA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Adomos SA reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Adomos SA

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

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