Correlation Between Citigroup and COMPUGROUP MEDSPADR

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

By analyzing existing cross correlation between Citigroup and COMPUGROUP MEDSPADR 1, you can compare the effects of market volatilities on Citigroup and COMPUGROUP MEDSPADR 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 COMPUGROUP MEDSPADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and COMPUGROUP MEDSPADR.

Diversification Opportunities for Citigroup and COMPUGROUP MEDSPADR

0.49

Correlation Coefficient

Citigroup  COMPUGROUP MEDSPADR

Very weak diversification

The 3 months correlation between Citigroup and COMPUGROUP is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and COMPUGROUP MEDSPADR 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COMPUGROUP MEDSPADR 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 COMPUGROUP MEDSPADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COMPUGROUP MEDSPADR has no effect on the direction of Citigroup i.e., Citigroup and COMPUGROUP MEDSPADR go up and down completely randomly.

Pair Corralation between Citigroup and COMPUGROUP MEDSPADR

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.85 times less return on investment than COMPUGROUP MEDSPADR. In addition to that, Citigroup is 1.02 times more volatile than COMPUGROUP MEDSPADR 1. It trades about 0.03 of its total potential returns per unit of risk. COMPUGROUP MEDSPADR 1 is currently generating about 0.05 per unit of volatility. If you would invest  2,080  in COMPUGROUP MEDSPADR 1 on December 27, 2024 and sell it today you would earn a total of  100.00  from holding COMPUGROUP MEDSPADR 1 or generate 4.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.83%
Values	Daily Returns

Citigroup  vs.  COMPUGROUP MEDSPADR 1

Citigroup

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Citigroup is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

COMPUGROUP MEDSPADR

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in COMPUGROUP MEDSPADR 1 are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, COMPUGROUP MEDSPADR is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Citigroup and COMPUGROUP MEDSPADR

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

The idea behind Citigroup and COMPUGROUP MEDSPADR 1 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.