Correlation Between Citigroup and Bolloré SE

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

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

Diversification Opportunities for Citigroup and Bolloré SE

-0.46

Correlation Coefficient

Citigroup  Bolloré SE

Very good diversification

The 3 months correlation between Citigroup and Bolloré is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Bollor SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bolloré SE 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 Bolloré SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bolloré SE has no effect on the direction of Citigroup i.e., Citigroup and Bolloré SE go up and down completely randomly.

Pair Corralation between Citigroup and Bolloré SE

Taking into account the 90-day investment horizon Citigroup is expected to under-perform the Bolloré SE. In addition to that, Citigroup is 1.1 times more volatile than Bollor SE. It trades about -0.04 of its total potential returns per unit of risk. Bollor SE is currently generating about 0.03 per unit of volatility. If you would invest  585.00  in Bollor SE on October 8, 2024 and sell it today you would earn a total of  3.00  from holding Bollor SE or generate 0.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	84.21%
Values	Daily Returns

Citigroup  vs.  Bollor SE

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.

Bolloré SE

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bollor SE are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Bolloré SE is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Citigroup and Bolloré SE

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

The idea behind Citigroup and Bollor SE 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.