Correlation Between Citigroup and Source MSCI

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

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

Diversification Opportunities for Citigroup and Source MSCI

0.0

Correlation Coefficient

Citigroup  Source MSCI

Pay attention - limited upside

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

Pair Corralation between Citigroup and Source MSCI

If you would invest  6,227  in Citigroup on September 29, 2024 and sell it today you would earn a total of  873.00  from holding Citigroup or generate 14.02% return on investment over 90 days.

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

Citigroup  vs.  Source MSCI Europe

Citigroup

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 9 (%) 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.

Source MSCI Europe

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Source MSCI Europe has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Source MSCI 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 Source MSCI

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

The idea behind Citigroup and Source MSCI Europe 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.