Correlation Between Citigroup and Manta Network

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

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

Diversification Opportunities for Citigroup and Manta Network

0.58

Correlation Coefficient

Citigroup  Manta Network

Very weak diversification

The 3 months correlation between Citigroup and Manta is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Manta Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manta Network 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 Manta Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manta Network has no effect on the direction of Citigroup i.e., Citigroup and Manta Network go up and down completely randomly.

Pair Corralation between Citigroup and Manta Network

Taking into account the 90-day investment horizon Citigroup is expected to generate 4.73 times less return on investment than Manta Network. But when comparing it to its historical volatility, Citigroup is 3.16 times less risky than Manta Network. It trades about 0.13 of its potential returns per unit of risk. Manta Network is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  61.00  in Manta Network on September 2, 2024 and sell it today you would earn a total of  58.00  from holding Manta Network or generate 95.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.97%
Values	Daily Returns

Citigroup  vs.  Manta Network

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

Manta Network

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Manta Network are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Manta Network exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Manta Network

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

The idea behind Citigroup and Manta Network 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 Transaction History module to view history of all your transactions and understand their impact on performance.