Correlation Between Citigroup and Home Plate

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

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

Diversification Opportunities for Citigroup and Home Plate

-0.71

Correlation Coefficient

Citigroup  Home Plate

Pay attention - limited upside

The 3 months correlation between Citigroup and Home is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Home Plate Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Plate Acquisition 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 Home Plate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Plate Acquisition has no effect on the direction of Citigroup i.e., Citigroup and Home Plate go up and down completely randomly.

Pair Corralation between Citigroup and Home Plate

If you would invest  5,683  in Citigroup on September 12, 2024 and sell it today you would earn a total of  1,513  from holding Citigroup or generate 26.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.56%
Values	Daily Returns

Citigroup  vs.  Home Plate Acquisition

Citigroup

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 16 (%) 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.

Home Plate Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Home Plate Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Home Plate is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Citigroup and Home Plate

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

The idea behind Citigroup and Home Plate Acquisition 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.