Correlation Between Citigroup and Skillful Craftsman

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

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

Diversification Opportunities for Citigroup and Skillful Craftsman

0.03

Correlation Coefficient

Citigroup  Skillful Craftsman

Significant diversification

The 3 months correlation between Citigroup and Skillful is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Skillful Craftsman Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skillful Craftsman 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 Skillful Craftsman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skillful Craftsman has no effect on the direction of Citigroup i.e., Citigroup and Skillful Craftsman go up and down completely randomly.

Pair Corralation between Citigroup and Skillful Craftsman

Taking into account the 90-day investment horizon Citigroup is expected to generate 3.65 times less return on investment than Skillful Craftsman. But when comparing it to its historical volatility, Citigroup is 1.49 times less risky than Skillful Craftsman. It trades about 0.01 of its potential returns per unit of risk. Skillful Craftsman Education is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  100.00  in Skillful Craftsman Education on December 29, 2024 and sell it today you would earn a total of  4.00  from holding Skillful Craftsman Education or generate 4.0% return on investment over 90 days.

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

Citigroup  vs.  Skillful Craftsman Education

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

Skillful Craftsman

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Skillful Craftsman Education are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain basic indicators, Skillful Craftsman may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Citigroup and Skillful Craftsman

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

The idea behind Citigroup and Skillful Craftsman Education 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.