Correlation Between Citigroup and Korn Ferry

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

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

Diversification Opportunities for Citigroup and Korn Ferry

0.75

Correlation Coefficient

Citigroup  Korn Ferry

Poor diversification

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

Pair Corralation between Citigroup and Korn Ferry

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.9 times more return on investment than Korn Ferry. However, Citigroup is 1.12 times less risky than Korn Ferry. It trades about 0.08 of its potential returns per unit of risk. Korn Ferry is currently generating about 0.05 per unit of risk. If you would invest  4,112  in Citigroup on September 18, 2024 and sell it today you would earn a total of  3,037  from holding Citigroup or generate 73.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.02%
Values	Daily Returns

Citigroup  vs.  Korn Ferry

Citigroup

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 12 (%) 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.

Korn Ferry

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Korn Ferry has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Korn Ferry is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Citigroup and Korn Ferry

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

The idea behind Citigroup and Korn Ferry 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.