Correlation Between Citigroup and CHELLARAMS PLC

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

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

Diversification Opportunities for Citigroup and CHELLARAMS PLC

0.0

Correlation Coefficient

Citigroup  CHELLARAMS PLC

Pay attention - limited upside

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

Pair Corralation between Citigroup and CHELLARAMS PLC

Taking into account the 90-day investment horizon Citigroup is expected to generate 2.18 times more return on investment than CHELLARAMS PLC. However, Citigroup is 2.18 times more volatile than CHELLARAMS PLC. It trades about 0.06 of its potential returns per unit of risk. CHELLARAMS PLC is currently generating about -0.09 per unit of risk. If you would invest  6,350  in Citigroup on September 30, 2024 and sell it today you would earn a total of  750.00  from holding Citigroup or generate 11.81% return on investment over 90 days.

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

Citigroup  vs.  CHELLARAMS PLC

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.

CHELLARAMS PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CHELLARAMS PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, CHELLARAMS PLC is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Citigroup and CHELLARAMS PLC

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

The idea behind Citigroup and CHELLARAMS PLC 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.