Correlation Between Citigroup and Alkim Alkali

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

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

Diversification Opportunities for Citigroup and Alkim Alkali

-0.21

Correlation Coefficient

Citigroup  Alkim Alkali

Very good diversification

The 3 months correlation between Citigroup and Alkim is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Alkim Alkali Kimya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alkim Alkali Kimya 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 Alkim Alkali. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alkim Alkali Kimya has no effect on the direction of Citigroup i.e., Citigroup and Alkim Alkali go up and down completely randomly.

Pair Corralation between Citigroup and Alkim Alkali

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.8 times more return on investment than Alkim Alkali. However, Citigroup is 1.25 times less risky than Alkim Alkali. It trades about 0.04 of its potential returns per unit of risk. Alkim Alkali Kimya is currently generating about -0.11 per unit of risk. If you would invest  7,051  in Citigroup on December 27, 2024 and sell it today you would earn a total of  273.00  from holding Citigroup or generate 3.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.75%
Values	Daily Returns

Citigroup  vs.  Alkim Alkali Kimya

Citigroup

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 3 (%) 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.

Alkim Alkali Kimya

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alkim Alkali Kimya has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Citigroup and Alkim Alkali

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

The idea behind Citigroup and Alkim Alkali Kimya 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.

Check out your portfolio center.

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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.