Correlation Between Citigroup and Globalink Investment

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

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

Diversification Opportunities for Citigroup and Globalink Investment

-0.22

Correlation Coefficient

Citigroup  Globalink Investment

Very good diversification

The 3 months correlation between Citigroup and Globalink is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Globalink Investment Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globalink Investment 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 Globalink Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globalink Investment has no effect on the direction of Citigroup i.e., Citigroup and Globalink Investment go up and down completely randomly.

Pair Corralation between Citigroup and Globalink Investment

If you would invest  7,100  in Citigroup on October 25, 2024 and sell it today you would earn a total of  1,098  from holding Citigroup or generate 15.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	10.53%
Values	Daily Returns

Citigroup  vs.  Globalink Investment Warrants

Citigroup

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Globalink Investment

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Globalink Investment Warrants has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly abnormal forward indicators, Globalink Investment showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Globalink Investment

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

The idea behind Citigroup and Globalink Investment Warrants 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.