Correlation Between Citigroup and Misr National

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

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

Diversification Opportunities for Citigroup and Misr National

0.94

Correlation Coefficient

Citigroup  Misr National

Almost no diversification

The 3 months correlation between Citigroup and Misr is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Misr National Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Misr National Steel 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 Misr National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Misr National Steel has no effect on the direction of Citigroup i.e., Citigroup and Misr National go up and down completely randomly.

Pair Corralation between Citigroup and Misr National

Taking into account the 90-day investment horizon Citigroup is expected to generate 2.6 times less return on investment than Misr National. But when comparing it to its historical volatility, Citigroup is 2.28 times less risky than Misr National. It trades about 0.2 of its potential returns per unit of risk. Misr National Steel is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  509.00  in Misr National Steel on September 16, 2024 and sell it today you would earn a total of  35.00  from holding Misr National Steel or generate 6.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	80.95%
Values	Daily Returns

Citigroup  vs.  Misr National Steel

Citigroup

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 13 (%) 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.

Misr National Steel

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Misr National Steel are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Misr National reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Misr National

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

The idea behind Citigroup and Misr National Steel 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.