Correlation Between Citigroup and BasedAI

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

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

Diversification Opportunities for Citigroup and BasedAI

0.57

Correlation Coefficient

Citigroup  BasedAI

Very weak diversification

The 3 months correlation between Citigroup and BasedAI is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and BasedAI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BasedAI 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 BasedAI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BasedAI has no effect on the direction of Citigroup i.e., Citigroup and BasedAI go up and down completely randomly.

Pair Corralation between Citigroup and BasedAI

Taking into account the 90-day investment horizon Citigroup is expected to generate 51.23 times less return on investment than BasedAI. But when comparing it to its historical volatility, Citigroup is 53.47 times less risky than BasedAI. It trades about 0.1 of its potential returns per unit of risk. BasedAI is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  0.00  in BasedAI on September 12, 2024 and sell it today you would earn a total of  568.00  from holding BasedAI or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	41.48%
Values	Daily Returns

Citigroup  vs.  BasedAI

Citigroup

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 16 (%) 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.

BasedAI

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BasedAI are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady technical and fundamental indicators, BasedAI demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and BasedAI

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

The idea behind Citigroup and BasedAI 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.