Correlation Between Citigroup and Fourlis Holdings

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

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

Diversification Opportunities for Citigroup and Fourlis Holdings

0.49

Correlation Coefficient

Citigroup  Fourlis Holdings

Very weak diversification

The 3 months correlation between Citigroup and Fourlis is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Fourlis Holdings SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fourlis Holdings 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 Fourlis Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fourlis Holdings has no effect on the direction of Citigroup i.e., Citigroup and Fourlis Holdings go up and down completely randomly.

Pair Corralation between Citigroup and Fourlis Holdings

Taking into account the 90-day investment horizon Citigroup is expected to generate 2.12 times less return on investment than Fourlis Holdings. In addition to that, Citigroup is 1.51 times more volatile than Fourlis Holdings SA. It trades about 0.04 of its total potential returns per unit of risk. Fourlis Holdings SA is currently generating about 0.13 per unit of volatility. If you would invest  374.00  in Fourlis Holdings SA on December 21, 2024 and sell it today you would earn a total of  36.00  from holding Fourlis Holdings SA or generate 9.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.67%
Values	Daily Returns

Citigroup  vs.  Fourlis Holdings SA

Citigroup

Risk-Adjusted Performance

Insignificant

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.

Fourlis Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fourlis Holdings SA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Fourlis Holdings may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Citigroup and Fourlis Holdings

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

The idea behind Citigroup and Fourlis Holdings SA 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.