Correlation Between Citigroup and Midas Fund

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

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

Diversification Opportunities for Citigroup and Midas Fund

-0.55

Correlation Coefficient

Citigroup  Midas Fund

Excellent diversification

The 3 months correlation between Citigroup and Midas is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Midas Fund Midas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midas Fund Midas 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 Midas Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midas Fund Midas has no effect on the direction of Citigroup i.e., Citigroup and Midas Fund go up and down completely randomly.

Pair Corralation between Citigroup and Midas Fund

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.57 times less return on investment than Midas Fund. But when comparing it to its historical volatility, Citigroup is 2.52 times less risky than Midas Fund. It trades about 0.25 of its potential returns per unit of risk. Midas Fund Midas is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  120.00  in Midas Fund Midas on September 15, 2024 and sell it today you would earn a total of  8.00  from holding Midas Fund Midas or generate 6.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Citigroup  vs.  Midas Fund Midas

Citigroup

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 13 (%) 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.

Midas Fund Midas

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Midas Fund Midas has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Midas Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Citigroup and Midas Fund

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

The idea behind Citigroup and Midas Fund Midas 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.