Correlation Between Citigroup and Bats Series

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

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

Diversification Opportunities for Citigroup and Bats Series

-0.06

Correlation Coefficient

Citigroup  Bats Series

Good diversification

The 3 months correlation between Citigroup and Bats is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Bats Series S in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bats Series S 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 Bats Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bats Series S has no effect on the direction of Citigroup i.e., Citigroup and Bats Series go up and down completely randomly.

Pair Corralation between Citigroup and Bats Series

If you would invest  918.00  in Bats Series S on September 25, 2024 and sell it today you would earn a total of  0.00  from holding Bats Series S or generate 0.0% return on investment over 90 days.

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

Citigroup  vs.  Bats Series S

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.

Bats Series S

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bats Series S has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Bats Series 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 Bats Series

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

The idea behind Citigroup and Bats Series S 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.