Correlation Between Citigroup and Property Lease

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

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

Diversification Opportunities for Citigroup and Property Lease

0.0

Correlation Coefficient

Citigroup  Property Lease

Pay attention - limited upside

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

Pair Corralation between Citigroup and Property Lease

If you would invest  5,788  in Citigroup on September 16, 2024 and sell it today you would earn a total of  1,313  from holding Citigroup or generate 22.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Citigroup  vs.  Property Lease

Citigroup

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 13 (%) 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.

Property Lease

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Property Lease has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, Property Lease is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Citigroup and Property Lease

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

The idea behind Citigroup and Property Lease 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.