Correlation Between Citigroup and Elevation Series

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

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

Diversification Opportunities for Citigroup and Elevation Series

0.95

Correlation Coefficient

Citigroup  Elevation Series

Almost no diversification

The 3 months correlation between Citigroup and Elevation is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Elevation Series Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elevation Series Trust 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 Elevation Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elevation Series Trust has no effect on the direction of Citigroup i.e., Citigroup and Elevation Series go up and down completely randomly.

Pair Corralation between Citigroup and Elevation Series

Taking into account the 90-day investment horizon Citigroup is expected to generate 2.19 times more return on investment than Elevation Series. However, Citigroup is 2.19 times more volatile than Elevation Series Trust. It trades about 0.07 of its potential returns per unit of risk. Elevation Series Trust is currently generating about 0.08 per unit of risk. If you would invest  4,733  in Citigroup on October 26, 2024 and sell it today you would earn a total of  3,415  from holding Citigroup or generate 72.15% return on investment over 90 days.

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

Citigroup  vs.  Elevation Series Trust

Citigroup

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 19 (%) 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.

Elevation Series Trust

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Elevation Series Trust are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady essential indicators, Elevation Series may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Citigroup and Elevation Series

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

The idea behind Citigroup and Elevation Series Trust 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.