Correlation Between Citigroup and Msif Advantage

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

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

Diversification Opportunities for Citigroup and Msif Advantage

0.96

Correlation Coefficient

Citigroup  Msif Advantage

Almost no diversification

The 3 months correlation between Citigroup and Msif is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Msif Advantage Port in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Msif Advantage Port 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 Msif Advantage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Msif Advantage Port has no effect on the direction of Citigroup i.e., Citigroup and Msif Advantage go up and down completely randomly.

Pair Corralation between Citigroup and Msif Advantage

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.45 times less return on investment than Msif Advantage. In addition to that, Citigroup is 1.22 times more volatile than Msif Advantage Port. It trades about 0.14 of its total potential returns per unit of risk. Msif Advantage Port is currently generating about 0.24 per unit of volatility. If you would invest  1,966  in Msif Advantage Port on October 1, 2024 and sell it today you would earn a total of  489.00  from holding Msif Advantage Port or generate 24.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Citigroup  vs.  Msif Advantage Port

Citigroup

Risk-Adjusted Performance

10 of 100

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 uncertain fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Msif Advantage Port

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Msif Advantage Port are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Msif Advantage showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Msif Advantage

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

The idea behind Citigroup and Msif Advantage Port 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.