Correlation Between Citigroup and Mainstay

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

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

Diversification Opportunities for Citigroup and Mainstay

0.0

Correlation Coefficient

Citigroup  Mainstay

Pay attention - limited upside

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

Pair Corralation between Citigroup and Mainstay

Taking into account the 90-day investment horizon Citigroup is expected to generate 15.3 times more return on investment than Mainstay. However, Citigroup is 15.3 times more volatile than Mainstay Government Liquidity. It trades about 0.08 of its potential returns per unit of risk. Mainstay Government Liquidity is currently generating about 0.12 per unit of risk. If you would invest  5,896  in Citigroup on October 13, 2024 and sell it today you would earn a total of  1,244  from holding Citigroup or generate 21.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	97.9%
Values	Daily Returns

Citigroup  vs.  Mainstay Government Liquidity

Citigroup

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 6 (%) 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 February 2025.

Mainstay Government

Risk-Adjusted Performance

0 of 100

Very Weak

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

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

The idea behind Citigroup and Mainstay Government Liquidity 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.