Correlation Between Citigroup and CIMG

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

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

Diversification Opportunities for Citigroup and CIMG

0.0

Correlation Coefficient

Citigroup  CIMG

Pay attention - limited upside

The 3 months correlation between Citigroup and CIMG is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and CIMG Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIMG Inc 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 CIMG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIMG Inc has no effect on the direction of Citigroup i.e., Citigroup and CIMG go up and down completely randomly.

Pair Corralation between Citigroup and CIMG

Taking into account the 90-day investment horizon Citigroup is expected to generate 40.47 times less return on investment than CIMG. But when comparing it to its historical volatility, Citigroup is 29.1 times less risky than CIMG. It trades about 0.06 of its potential returns per unit of risk. CIMG Inc is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  160.00  in CIMG Inc on September 30, 2024 and sell it today you would lose (77.00) from holding CIMG Inc or give up 48.12% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Citigroup  vs.  CIMG Inc

Citigroup

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 9 (%) 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.

CIMG Inc

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CIMG Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal primary indicators, CIMG reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and CIMG

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

The idea behind Citigroup and CIMG Inc 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.