Correlation Between Citigroup and Indus Realty

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

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

Diversification Opportunities for Citigroup and Indus Realty

0.79

Correlation Coefficient

Citigroup  Indus Realty

Poor diversification

The 3 months correlation between Citigroup and Indus is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Indus Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indus Realty Trust 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 Indus Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indus Realty Trust has no effect on the direction of Citigroup i.e., Citigroup and Indus Realty go up and down completely randomly.

Pair Corralation between Citigroup and Indus Realty

If you would invest  6,092  in Citigroup on September 1, 2024 and sell it today you would earn a total of  995.00  from holding Citigroup or generate 16.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	1.59%
Values	Daily Returns

Citigroup  vs.  Indus Realty Trust

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

Indus Realty Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Indus Realty Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Indus Realty is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Citigroup and Indus Realty

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

The idea behind Citigroup and Indus Realty Trust 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..