Correlation Between Citigroup and Conquer Risk

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

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

Diversification Opportunities for Citigroup and Conquer Risk

0.95

Correlation Coefficient

Citigroup  Conquer Risk

Almost no diversification

The 3 months correlation between Citigroup and Conquer is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Conquer Risk Tactical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Conquer Risk Tactical 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 Conquer Risk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Conquer Risk Tactical has no effect on the direction of Citigroup i.e., Citigroup and Conquer Risk go up and down completely randomly.

Pair Corralation between Citigroup and Conquer Risk

Taking into account the 90-day investment horizon Citigroup is expected to generate 2.39 times more return on investment than Conquer Risk. However, Citigroup is 2.39 times more volatile than Conquer Risk Tactical. It trades about 0.14 of its potential returns per unit of risk. Conquer Risk Tactical is currently generating about 0.24 per unit of risk. If you would invest  6,133  in Citigroup on September 27, 2024 and sell it today you would earn a total of  967.00  from holding Citigroup or generate 15.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Citigroup  vs.  Conquer Risk Tactical

Citigroup

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 10 (%) 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.

Conquer Risk Tactical

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Conquer Risk Tactical are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Conquer Risk may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Citigroup and Conquer Risk

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

The idea behind Citigroup and Conquer Risk Tactical 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.