Correlation Between Citigroup and Cptl Grp

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

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

Diversification Opportunities for Citigroup and Cptl Grp

0.0

Correlation Coefficient

Citigroup  Cptl Grp

Pay attention - limited upside

The 3 months correlation between Citigroup and Cptl is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Cptl Grp Hldngs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cptl Grp Hldngs 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 Cptl Grp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cptl Grp Hldngs has no effect on the direction of Citigroup i.e., Citigroup and Cptl Grp go up and down completely randomly.

Pair Corralation between Citigroup and Cptl Grp

If you would invest  0.02  in Cptl Grp Hldngs on September 24, 2024 and sell it today you would earn a total of  0.00  from holding Cptl Grp Hldngs or generate 0.0% return on investment over 90 days.

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

Citigroup  vs.  Cptl Grp Hldngs

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 uncertain fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Cptl Grp Hldngs

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cptl Grp Hldngs has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical indicators, Cptl Grp is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Citigroup and Cptl Grp

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

The idea behind Citigroup and Cptl Grp Hldngs 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 Stocks Directory module to find actively traded stocks across global markets.