Correlation Between Citigroup and Bull Profund

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

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

Diversification Opportunities for Citigroup and Bull Profund

0.88

Correlation Coefficient

Citigroup  Bull Profund

Very poor diversification

The 3 months correlation between Citigroup and Bull is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Bull Profund Investor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bull Profund Investor 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 Bull Profund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bull Profund Investor has no effect on the direction of Citigroup i.e., Citigroup and Bull Profund go up and down completely randomly.

Pair Corralation between Citigroup and Bull Profund

Taking into account the 90-day investment horizon Citigroup is expected to generate 2.21 times more return on investment than Bull Profund. However, Citigroup is 2.21 times more volatile than Bull Profund Investor. It trades about 0.13 of its potential returns per unit of risk. Bull Profund Investor is currently generating about 0.07 per unit of risk. If you would invest  6,205  in Citigroup on October 7, 2024 and sell it today you would earn a total of  895.00  from holding Citigroup or generate 14.42% return on investment over 90 days.

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

Citigroup  vs.  Bull Profund Investor

Citigroup

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 9 (%) 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.

Bull Profund Investor

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Bull Profund Investor are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Bull Profund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Citigroup and Bull Profund

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

The idea behind Citigroup and Bull Profund Investor 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.