Correlation Between Citigroup and UBS CH

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

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

Diversification Opportunities for Citigroup and UBS CH

-0.43

Correlation Coefficient

Citigroup  UBS CH

Very good diversification

The 3 months correlation between Citigroup and UBS is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and UBS CH Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS CH Property 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 UBS CH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBS CH Property has no effect on the direction of Citigroup i.e., Citigroup and UBS CH go up and down completely randomly.

Pair Corralation between Citigroup and UBS CH

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.94 times more return on investment than UBS CH. However, Citigroup is 1.06 times less risky than UBS CH. It trades about 0.16 of its potential returns per unit of risk. UBS CH Property is currently generating about 0.0 per unit of risk. If you would invest  6,209  in Citigroup on October 15, 2024 and sell it today you would earn a total of  1,068  from holding Citigroup or generate 17.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.72%
Values	Daily Returns

Citigroup  vs.  UBS CH Property

Citigroup

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 12 (%) 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.

UBS CH Property

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UBS CH Property has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly stable basic indicators, UBS CH is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Citigroup and UBS CH

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

The idea behind Citigroup and UBS CH Property 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.