Correlation Between Citigroup and Harbor Disruptive

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

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

Diversification Opportunities for Citigroup and Harbor Disruptive

0.75

Correlation Coefficient

Citigroup  Harbor Disruptive

Poor diversification

The 3 months correlation between Citigroup and Harbor is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Harbor Disruptive Innovation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbor Disruptive 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 Harbor Disruptive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbor Disruptive has no effect on the direction of Citigroup i.e., Citigroup and Harbor Disruptive go up and down completely randomly.

Pair Corralation between Citigroup and Harbor Disruptive

Taking into account the 90-day investment horizon Citigroup is expected to generate 6.88 times more return on investment than Harbor Disruptive. However, Citigroup is 6.88 times more volatile than Harbor Disruptive Innovation. It trades about 0.07 of its potential returns per unit of risk. Harbor Disruptive Innovation is currently generating about 0.46 per unit of risk. If you would invest  7,196  in Citigroup on October 12, 2024 and sell it today you would earn a total of  130.00  from holding Citigroup or generate 1.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	40.0%
Values	Daily Returns

Citigroup  vs.  Harbor Disruptive Innovation

Citigroup

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Harbor Disruptive

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Harbor Disruptive Innovation has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very unsteady basic indicators, Harbor Disruptive may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Citigroup and Harbor Disruptive

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

The idea behind Citigroup and Harbor Disruptive Innovation 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.