Correlation Between Citigroup and Cohen Circle

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

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

Diversification Opportunities for Citigroup and Cohen Circle

-0.56

Correlation Coefficient

Citigroup  Cohen Circle

Excellent diversification

The 3 months correlation between Citigroup and Cohen is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Cohen Circle Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Circle Acquisition 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 Cohen Circle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cohen Circle Acquisition has no effect on the direction of Citigroup i.e., Citigroup and Cohen Circle go up and down completely randomly.

Pair Corralation between Citigroup and Cohen Circle

Taking into account the 90-day investment horizon Citigroup is expected to generate 44.44 times less return on investment than Cohen Circle. But when comparing it to its historical volatility, Citigroup is 9.62 times less risky than Cohen Circle. It trades about 0.08 of its potential returns per unit of risk. Cohen Circle Acquisition is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest  27.00  in Cohen Circle Acquisition on September 18, 2024 and sell it today you would earn a total of  17.00  from holding Cohen Circle Acquisition or generate 62.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	2.22%
Values	Daily Returns

Citigroup  vs.  Cohen Circle Acquisition

Citigroup

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 12 (%) 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.

Cohen Circle Acquisition

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Cohen Circle Acquisition are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Cohen Circle showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Cohen Circle

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

The idea behind Citigroup and Cohen Circle Acquisition 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.