Correlation Between Citigroup and Nextplat Corp

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

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

Diversification Opportunities for Citigroup and Nextplat Corp

-0.02

Correlation Coefficient

Citigroup  Nextplat Corp

Good diversification

The 3 months correlation between Citigroup and Nextplat is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Nextplat Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextplat Corp 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 Nextplat Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextplat Corp has no effect on the direction of Citigroup i.e., Citigroup and Nextplat Corp go up and down completely randomly.

Pair Corralation between Citigroup and Nextplat Corp

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.21 times more return on investment than Nextplat Corp. However, Citigroup is 4.77 times less risky than Nextplat Corp. It trades about 0.01 of its potential returns per unit of risk. Nextplat Corp is currently generating about 0.0 per unit of risk. If you would invest  6,991  in Citigroup on December 30, 2024 and sell it today you would earn a total of  42.00  from holding Citigroup or generate 0.6% return on investment over 90 days.

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

Citigroup  vs.  Nextplat Corp

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.

Nextplat Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nextplat Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Nextplat Corp is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Citigroup and Nextplat Corp

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

The idea behind Citigroup and Nextplat Corp 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.