Correlation Between Citigroup and Msif Real

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

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

Diversification Opportunities for Citigroup and Msif Real

0.76

Correlation Coefficient

Citigroup  Msif Real

Poor diversification

The 3 months correlation between Citigroup and Msif is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Msif Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Msif Real Estate 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 Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Msif Real Estate has no effect on the direction of Citigroup i.e., Citigroup and Msif Real go up and down completely randomly.

Pair Corralation between Citigroup and Msif Real

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.51 times more return on investment than Msif Real. However, Citigroup is 1.51 times more volatile than Msif Real Estate. It trades about 0.07 of its potential returns per unit of risk. Msif Real Estate is currently generating about 0.06 per unit of risk. If you would invest  4,168  in Citigroup on September 20, 2024 and sell it today you would earn a total of  2,734  from holding Citigroup or generate 65.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.57%
Values	Daily Returns

Citigroup  vs.  Msif Real Estate

Citigroup

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Citigroup may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Msif Real Estate

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days Msif Real Estate has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Msif Real 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 Msif Real

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

The idea behind Citigroup and Msif Real Estate 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.