Correlation Between Citigroup and Deer Consumer

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

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

Diversification Opportunities for Citigroup and Deer Consumer

0.0

Correlation Coefficient

Citigroup  Deer Consumer

Pay attention - limited upside

The 3 months correlation between Citigroup and Deer is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Deer Consumer Prodct in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deer Consumer Prodct 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 Deer Consumer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deer Consumer Prodct has no effect on the direction of Citigroup i.e., Citigroup and Deer Consumer go up and down completely randomly.

Pair Corralation between Citigroup and Deer Consumer

If you would invest  6,765  in Citigroup on December 18, 2024 and sell it today you would earn a total of  229.00  from holding Citigroup or generate 3.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Citigroup  vs.  Deer Consumer Prodct

Citigroup

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 3 (%) 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.

Deer Consumer Prodct

Risk-Adjusted Performance

Very Weak

Over the last 90 days Deer Consumer Prodct has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Deer Consumer is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Citigroup and Deer Consumer

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

The idea behind Citigroup and Deer Consumer Prodct 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.