Correlation Between Citigroup and Gamco International

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

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

Diversification Opportunities for Citigroup and Gamco International

0.21

Correlation Coefficient

Citigroup  Gamco International

Modest diversification

The 3 months correlation between Citigroup and Gamco is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Gamco International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamco International 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 Gamco International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamco International has no effect on the direction of Citigroup i.e., Citigroup and Gamco International go up and down completely randomly.

Pair Corralation between Citigroup and Gamco International

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.49 times more return on investment than Gamco International. However, Citigroup is 1.49 times more volatile than Gamco International Growth. It trades about 0.09 of its potential returns per unit of risk. Gamco International Growth is currently generating about 0.0 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	Very Weak
Accuracy	100.0%
Values	Daily Returns

Citigroup  vs.  Gamco International Growth

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.

Gamco International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gamco International Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Gamco International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Citigroup and Gamco International

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

The idea behind Citigroup and Gamco International Growth 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.