Correlation Between Citigroup and Begistics Public

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

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

Diversification Opportunities for Citigroup and Begistics Public

-0.48

Correlation Coefficient

Citigroup  Begistics Public

Very good diversification

The 3 months correlation between Citigroup and Begistics is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Begistics Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Begistics Public 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 Begistics Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Begistics Public has no effect on the direction of Citigroup i.e., Citigroup and Begistics Public go up and down completely randomly.

Pair Corralation between Citigroup and Begistics Public

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.25 times more return on investment than Begistics Public. However, Citigroup is 4.05 times less risky than Begistics Public. It trades about 0.16 of its potential returns per unit of risk. Begistics Public is currently generating about 0.03 per unit of risk. If you would invest  6,360  in Citigroup on September 26, 2024 and sell it today you would earn a total of  740.00  from holding Citigroup or generate 11.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	97.56%
Values	Daily Returns

Citigroup  vs.  Begistics Public

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.

Begistics Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Begistics Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, Begistics Public is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Citigroup and Begistics Public

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

The idea behind Citigroup and Begistics Public 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.