Correlation Between Citigroup and PLMIW Old

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

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

Diversification Opportunities for Citigroup and PLMIW Old

0.0

Correlation Coefficient

Citigroup  PLMIW Old

Pay attention - limited upside

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

Pair Corralation between Citigroup and PLMIW Old

If you would invest  6,316  in Citigroup on December 27, 2024 and sell it today you would earn a total of  1,008  from holding Citigroup or generate 15.96% return on investment over 90 days.

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

Citigroup  vs.  PLMIW Old

Citigroup

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 3 (%) 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.

PLMIW Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days PLMIW Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable forward indicators, PLMIW Old is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Citigroup and PLMIW Old

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

The idea behind Citigroup and PLMIW Old 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.