Correlation Between Citigroup and Iron Mountain

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

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

Diversification Opportunities for Citigroup and Iron Mountain

-0.71

Correlation Coefficient

Citigroup  Iron Mountain

Pay attention - limited upside

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

Pair Corralation between Citigroup and Iron Mountain

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.06 times more return on investment than Iron Mountain. However, Citigroup is 1.06 times more volatile than Iron Mountain Incorporated. It trades about 0.09 of its potential returns per unit of risk. Iron Mountain Incorporated is currently generating about -0.33 per unit of risk. If you would invest  7,093  in Citigroup on December 3, 2024 and sell it today you would earn a total of  624.00  from holding Citigroup or generate 8.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	93.44%
Values	Daily Returns

Citigroup  vs.  Iron Mountain Incorporated

Citigroup

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Citigroup may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Iron Mountain

Risk-Adjusted Performance

Very Weak

Over the last 90 days Iron Mountain Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Citigroup and Iron Mountain

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

The idea behind Citigroup and Iron Mountain Incorporated 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.