Correlation Between Citigroup and Glaukos Corp

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

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

Diversification Opportunities for Citigroup and Glaukos Corp

0.51

Correlation Coefficient

Citigroup  Glaukos Corp

Very weak diversification

The 3 months correlation between Citigroup and Glaukos is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Glaukos Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glaukos Corp 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 Glaukos Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glaukos Corp has no effect on the direction of Citigroup i.e., Citigroup and Glaukos Corp go up and down completely randomly.

Pair Corralation between Citigroup and Glaukos Corp

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.51 times more return on investment than Glaukos Corp. However, Citigroup is 1.95 times less risky than Glaukos Corp. It trades about 0.03 of its potential returns per unit of risk. Glaukos Corp is currently generating about -0.13 per unit of risk. If you would invest  6,991  in Citigroup on December 29, 2024 and sell it today you would earn a total of  194.00  from holding Citigroup or generate 2.77% return on investment over 90 days.

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

Citigroup  vs.  Glaukos Corp

Citigroup

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 2 (%) 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 newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Glaukos Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Glaukos Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Citigroup and Glaukos Corp

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

The idea behind Citigroup and Glaukos Corp 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.