Correlation Between Citigroup and Nuveen New

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

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

Diversification Opportunities for Citigroup and Nuveen New

0.12

Correlation Coefficient

Citigroup  Nuveen New

Average diversification

The 3 months correlation between Citigroup and Nuveen is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Nuveen New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen New York 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 Nuveen New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen New York has no effect on the direction of Citigroup i.e., Citigroup and Nuveen New go up and down completely randomly.

Pair Corralation between Citigroup and Nuveen New

Taking into account the 90-day investment horizon Citigroup is expected to under-perform the Nuveen New. In addition to that, Citigroup is 6.92 times more volatile than Nuveen New York. It trades about -0.22 of its total potential returns per unit of risk. Nuveen New York is currently generating about -0.03 per unit of volatility. If you would invest  1,181  in Nuveen New York on December 28, 2024 and sell it today you would lose (3.00) from holding Nuveen New York or give up 0.25% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Citigroup  vs.  Nuveen New York

Citigroup

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Citigroup is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Nuveen New York

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen New York are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Nuveen New is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Citigroup and Nuveen New

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

The idea behind Citigroup and Nuveen New York 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.