Correlation Between Citigroup and MCCORMICK INC

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

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

Diversification Opportunities for Citigroup and MCCORMICK INC

0.0

Correlation Coefficient

Citigroup  MCCORMICK INC

Pay attention - limited upside

The 3 months correlation between Citigroup and MCCORMICK is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and MCCORMICK INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCCORMICK INC 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 MCCORMICK INC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCCORMICK INC has no effect on the direction of Citigroup i.e., Citigroup and MCCORMICK INC go up and down completely randomly.

Pair Corralation between Citigroup and MCCORMICK INC

If you would invest  7,250  in Citigroup on October 11, 2024 and sell it today you would earn a total of  76.00  from holding Citigroup or generate 1.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Citigroup  vs.  MCCORMICK INC

Citigroup

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

MCCORMICK INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MCCORMICK INC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, MCCORMICK INC is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Citigroup and MCCORMICK INC

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

The idea behind Citigroup and MCCORMICK INC 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.