Correlation Between Citigroup and Global Ports

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

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

Diversification Opportunities for Citigroup and Global Ports

0.0

Correlation Coefficient

Citigroup  Global Ports

Pay attention - limited upside

The 3 months correlation between Citigroup and Global is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Global Ports Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Ports Holding 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 Global Ports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Ports Holding has no effect on the direction of Citigroup i.e., Citigroup and Global Ports go up and down completely randomly.

Pair Corralation between Citigroup and Global Ports

If you would invest  4,714  in Citigroup on October 3, 2024 and sell it today you would earn a total of  2,325  from holding Citigroup or generate 49.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Citigroup  vs.  Global Ports Holding

Citigroup

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Global Ports Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Ports Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Global Ports is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Citigroup and Global Ports

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

The idea behind Citigroup and Global Ports Holding 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.