Correlation Between Citigroup and ITV -

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

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

Diversification Opportunities for Citigroup and ITV -

-0.04

Correlation Coefficient

Citigroup  ITV -

Good diversification

The 3 months correlation between Citigroup and ITV is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and ITV Dusseldorf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITV Dusseldorf 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 ITV -. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITV Dusseldorf has no effect on the direction of Citigroup i.e., Citigroup and ITV - go up and down completely randomly.

Pair Corralation between Citigroup and ITV -

Taking into account the 90-day investment horizon Citigroup is expected to generate 2.2 times less return on investment than ITV -. In addition to that, Citigroup is 1.07 times more volatile than ITV Dusseldorf. It trades about 0.04 of its total potential returns per unit of risk. ITV Dusseldorf is currently generating about 0.09 per unit of volatility. If you would invest  86.00  in ITV Dusseldorf on December 19, 2024 and sell it today you would earn a total of  8.00  from holding ITV Dusseldorf or generate 9.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Citigroup  vs.  ITV Dusseldorf

Citigroup

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Citigroup is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

ITV Dusseldorf

Risk-Adjusted Performance

OK

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

Pair Trading with Citigroup and ITV -

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

The idea behind Citigroup and ITV Dusseldorf 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.