Correlation Between Citigroup and Gabelli

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

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

Diversification Opportunities for Citigroup and Gabelli

0.0

Correlation Coefficient

Citigroup  Gabelli

Pay attention - limited upside

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

Pair Corralation between Citigroup and Gabelli

If you would invest  6,077  in Citigroup on October 3, 2024 and sell it today you would earn a total of  962.00  from holding Citigroup or generate 15.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.61%
Values	Daily Returns

Citigroup  vs.  Gabelli

Citigroup

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Gabelli

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gabelli has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Gabelli is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Citigroup and Gabelli

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

The idea behind Citigroup and Gabelli 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.

Check out your portfolio center.

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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.