Correlation Between Citigroup and Cryomass Technologies

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

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

Diversification Opportunities for Citigroup and Cryomass Technologies

0.58

Correlation Coefficient

Citigroup  Cryomass Technologies

Very weak diversification

The 3 months correlation between Citigroup and Cryomass is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Cryomass Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cryomass Technologies 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 Cryomass Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cryomass Technologies has no effect on the direction of Citigroup i.e., Citigroup and Cryomass Technologies go up and down completely randomly.

Pair Corralation between Citigroup and Cryomass Technologies

Taking into account the 90-day investment horizon Citigroup is expected to under-perform the Cryomass Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Citigroup is 4.45 times less risky than Cryomass Technologies. The stock trades about -0.17 of its potential returns per unit of risk. The Cryomass Technologies is currently generating about 0.46 of returns per unit of risk over similar time horizon. If you would invest  1.93  in Cryomass Technologies on December 5, 2024 and sell it today you would earn a total of  2.64  from holding Cryomass Technologies or generate 136.79% return on investment over 90 days.

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

Citigroup  vs.  Cryomass Technologies

Citigroup

Risk-Adjusted Performance

Weak

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 recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Cryomass Technologies

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cryomass Technologies are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Cryomass Technologies displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Cryomass Technologies

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

The idea behind Citigroup and Cryomass Technologies 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.