Correlation Between Citigroup and Holbrook Structured

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

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

Diversification Opportunities for Citigroup and Holbrook Structured

0.86

Correlation Coefficient

Citigroup  Holbrook Structured

Very poor diversification

The 3 months correlation between Citigroup and Holbrook is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Holbrook Structured Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holbrook Structured 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 Holbrook Structured. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Holbrook Structured has no effect on the direction of Citigroup i.e., Citigroup and Holbrook Structured go up and down completely randomly.

Pair Corralation between Citigroup and Holbrook Structured

Taking into account the 90-day investment horizon Citigroup is expected to generate 8.27 times more return on investment than Holbrook Structured. However, Citigroup is 8.27 times more volatile than Holbrook Structured Income. It trades about 0.07 of its potential returns per unit of risk. Holbrook Structured Income is currently generating about 0.19 per unit of risk. If you would invest  4,812  in Citigroup on October 24, 2024 and sell it today you would earn a total of  3,391  from holding Citigroup or generate 70.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.8%
Values	Daily Returns

Citigroup  vs.  Holbrook Structured Income

Citigroup

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 18 (%) 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.

Holbrook Structured

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Holbrook Structured Income are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Holbrook Structured 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 Holbrook Structured

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

The idea behind Citigroup and Holbrook Structured Income 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.