Correlation Between Citigroup and Harvest Eli

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

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

Diversification Opportunities for Citigroup and Harvest Eli

0.45

Correlation Coefficient

Citigroup  Harvest Eli

Very weak diversification

The 3 months correlation between Citigroup and Harvest is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Harvest Eli Lilly in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harvest Eli Lilly 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 Harvest Eli. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harvest Eli Lilly has no effect on the direction of Citigroup i.e., Citigroup and Harvest Eli go up and down completely randomly.

Pair Corralation between Citigroup and Harvest Eli

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.91 times more return on investment than Harvest Eli. However, Citigroup is 1.1 times less risky than Harvest Eli. It trades about 0.13 of its potential returns per unit of risk. Harvest Eli Lilly is currently generating about 0.1 per unit of risk. If you would invest  7,093  in Citigroup on December 3, 2024 and sell it today you would earn a total of  902.00  from holding Citigroup or generate 12.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Citigroup  vs.  Harvest Eli Lilly

Citigroup

Risk-Adjusted Performance

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.

Harvest Eli Lilly

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Harvest Eli Lilly are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating technical indicators, Harvest Eli may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Citigroup and Harvest Eli

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

The idea behind Citigroup and Harvest Eli Lilly 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.