Correlation Between Citigroup and Formuepleje Limittellus

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

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

Diversification Opportunities for Citigroup and Formuepleje Limittellus

0.52

Correlation Coefficient

Citigroup  Formuepleje Limittellus

Very weak diversification

The 3 months correlation between Citigroup and Formuepleje is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Formuepleje Limittellus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Formuepleje Limittellus 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 Formuepleje Limittellus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Formuepleje Limittellus has no effect on the direction of Citigroup i.e., Citigroup and Formuepleje Limittellus go up and down completely randomly.

Pair Corralation between Citigroup and Formuepleje Limittellus

Taking into account the 90-day investment horizon Citigroup is expected to generate 2.46 times more return on investment than Formuepleje Limittellus. However, Citigroup is 2.46 times more volatile than Formuepleje Limittellus. It trades about 0.09 of its potential returns per unit of risk. Formuepleje Limittellus is currently generating about -0.08 per unit of risk. If you would invest  7,101  in Citigroup on December 4, 2024 and sell it today you would earn a total of  616.00  from holding Citigroup or generate 8.67% return on investment over 90 days.

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

Citigroup  vs.  Formuepleje Limittellus

Citigroup

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Citigroup may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Formuepleje Limittellus

Risk-Adjusted Performance

Very Weak

Over the last 90 days Formuepleje Limittellus has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward indicators, Formuepleje Limittellus is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Citigroup and Formuepleje Limittellus

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

The idea behind Citigroup and Formuepleje Limittellus 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.