Correlation Between Citigroup and Integrated Diagnostics

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

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

Diversification Opportunities for Citigroup and Integrated Diagnostics

0.14

Correlation Coefficient

Citigroup  Integrated Diagnostics

Average diversification

The 3 months correlation between Citigroup and Integrated is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Integrated Diagnostics Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Diagnostics 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 Integrated Diagnostics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Diagnostics has no effect on the direction of Citigroup i.e., Citigroup and Integrated Diagnostics go up and down completely randomly.

Pair Corralation between Citigroup and Integrated Diagnostics

If you would invest  6,360  in Citigroup on September 27, 2024 and sell it today you would earn a total of  740.00  from holding Citigroup or generate 11.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	81.4%
Values	Daily Returns

Citigroup  vs.  Integrated Diagnostics 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 uncertain fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Integrated Diagnostics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Integrated Diagnostics Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Integrated Diagnostics is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Citigroup and Integrated Diagnostics

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

The idea behind Citigroup and Integrated Diagnostics Holdings 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.