Correlation Between Citigroup and Cybin

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

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

Diversification Opportunities for Citigroup and Cybin

-0.31

Correlation Coefficient

Citigroup  Cybin

Very good diversification

The 3 months correlation between Citigroup and Cybin is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Cybin Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cybin Inc 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 Cybin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cybin Inc has no effect on the direction of Citigroup i.e., Citigroup and Cybin go up and down completely randomly.

Pair Corralation between Citigroup and Cybin

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.47 times more return on investment than Cybin. However, Citigroup is 2.11 times less risky than Cybin. It trades about 0.45 of its potential returns per unit of risk. Cybin Inc is currently generating about 0.01 per unit of risk. If you would invest  6,842  in Citigroup on October 20, 2024 and sell it today you would earn a total of  1,157  from holding Citigroup or generate 16.91% return on investment over 90 days.

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

Citigroup  vs.  Cybin Inc

Citigroup

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 19 (%) 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.

Cybin Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cybin Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Citigroup and Cybin

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

The idea behind Citigroup and Cybin Inc 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.