Correlation Between Citigroup and JCurve Solutions

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

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

Diversification Opportunities for Citigroup and JCurve Solutions

0.64

Correlation Coefficient

Citigroup  JCurve Solutions

Poor diversification

The 3 months correlation between Citigroup and JCurve is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and JCurve Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JCurve Solutions 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 JCurve Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JCurve Solutions has no effect on the direction of Citigroup i.e., Citigroup and JCurve Solutions go up and down completely randomly.

Pair Corralation between Citigroup and JCurve Solutions

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.62 times more return on investment than JCurve Solutions. However, Citigroup is 1.61 times less risky than JCurve Solutions. It trades about 0.33 of its potential returns per unit of risk. JCurve Solutions is currently generating about 0.1 per unit of risk. If you would invest  6,235  in Citigroup on September 4, 2024 and sell it today you would earn a total of  907.00  from holding Citigroup or generate 14.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Citigroup  vs.  JCurve Solutions

Citigroup

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 11 (%) 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.

JCurve Solutions

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in JCurve Solutions are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, JCurve Solutions unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and JCurve Solutions

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

The idea behind Citigroup and JCurve Solutions 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.