Correlation Between Citigroup and Pimco Flexible

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

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

Diversification Opportunities for Citigroup and Pimco Flexible

-0.08

Correlation Coefficient

Citigroup  Pimco Flexible

Good diversification

The 3 months correlation between Citigroup and Pimco is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Pimco Flexible Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Flexible Credit 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 Pimco Flexible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Flexible Credit has no effect on the direction of Citigroup i.e., Citigroup and Pimco Flexible go up and down completely randomly.

Pair Corralation between Citigroup and Pimco Flexible

Taking into account the 90-day investment horizon Citigroup is expected to generate 5.02 times more return on investment than Pimco Flexible. However, Citigroup is 5.02 times more volatile than Pimco Flexible Credit. It trades about 0.05 of its potential returns per unit of risk. Pimco Flexible Credit is currently generating about -0.29 per unit of risk. If you would invest  7,186  in Citigroup on October 9, 2024 and sell it today you would earn a total of  88.00  from holding Citigroup or generate 1.22% return on investment over 90 days.

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

Citigroup  vs.  Pimco Flexible Credit

Citigroup

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pimco Flexible Credit

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pimco Flexible Credit has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong essential indicators, Pimco Flexible 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 Pimco Flexible

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

The idea behind Citigroup and Pimco Flexible Credit 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.