Correlation Between Citigroup and ClimateRock Right

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

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

Diversification Opportunities for Citigroup and ClimateRock Right

-0.53

Correlation Coefficient

Citigroup  ClimateRock Right

Excellent diversification

The 3 months correlation between Citigroup and ClimateRock is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and ClimateRock Right in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ClimateRock Right 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 ClimateRock Right. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ClimateRock Right has no effect on the direction of Citigroup i.e., Citigroup and ClimateRock Right go up and down completely randomly.

Pair Corralation between Citigroup and ClimateRock Right

Taking into account the 90-day investment horizon Citigroup is expected to generate 292.36 times less return on investment than ClimateRock Right. But when comparing it to its historical volatility, Citigroup is 109.94 times less risky than ClimateRock Right. It trades about 0.06 of its potential returns per unit of risk. ClimateRock Right is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  10.00  in ClimateRock Right on October 11, 2024 and sell it today you would earn a total of  0.00  from holding ClimateRock Right or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	37.58%
Values	Daily Returns

Citigroup  vs.  ClimateRock Right

Citigroup

Risk-Adjusted Performance

9 of 100

Good

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

ClimateRock Right

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days ClimateRock Right has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively weak fundamental indicators, ClimateRock Right reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and ClimateRock Right

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

The idea behind Citigroup and ClimateRock Right 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.