Correlation Between Citigroup and Barrow Hanley

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

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

Diversification Opportunities for Citigroup and Barrow Hanley

-0.75

Correlation Coefficient

Citigroup  Barrow Hanley

Pay attention - limited upside

The 3 months correlation between Citigroup and Barrow is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Barrow Hanley Concentrated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barrow Hanley Concen 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 Barrow Hanley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barrow Hanley Concen has no effect on the direction of Citigroup i.e., Citigroup and Barrow Hanley go up and down completely randomly.

Pair Corralation between Citigroup and Barrow Hanley

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.89 times more return on investment than Barrow Hanley. However, Citigroup is 1.89 times more volatile than Barrow Hanley Concentrated. It trades about 0.01 of its potential returns per unit of risk. Barrow Hanley Concentrated is currently generating about -0.24 per unit of risk. If you would invest  7,143  in Citigroup on October 13, 2024 and sell it today you would lose (3.00) from holding Citigroup or give up 0.04% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Citigroup  vs.  Barrow Hanley Concentrated

Citigroup

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Citigroup may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Barrow Hanley Concen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Barrow Hanley Concentrated has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's forward indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Citigroup and Barrow Hanley

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

The idea behind Citigroup and Barrow Hanley Concentrated 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.