Correlation Between Citigroup and ISS AS

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

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

Diversification Opportunities for Citigroup and ISS AS

-0.1

Correlation Coefficient

Citigroup  ISS AS

Good diversification

The 3 months correlation between Citigroup and ISS is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and ISS AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ISS AS 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 ISS AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ISS AS has no effect on the direction of Citigroup i.e., Citigroup and ISS AS go up and down completely randomly.

Pair Corralation between Citigroup and ISS AS

Taking into account the 90-day investment horizon Citigroup is expected to generate 5.51 times less return on investment than ISS AS. But when comparing it to its historical volatility, Citigroup is 1.05 times less risky than ISS AS. It trades about 0.03 of its potential returns per unit of risk. ISS AS is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  13,130  in ISS AS on December 28, 2024 and sell it today you would earn a total of  3,080  from holding ISS AS or generate 23.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

Citigroup  vs.  ISS AS

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 newest stock price tumult, may contribute to shorter-term losses for the shareholders.

ISS AS

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ISS AS are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, ISS AS displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and ISS AS

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

The idea behind Citigroup and ISS AS 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.