Correlation Between Citigroup and Powell Max

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

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

Diversification Opportunities for Citigroup and Powell Max

-0.62

Correlation Coefficient

Citigroup  Powell Max

Excellent diversification

The 3 months correlation between Citigroup and Powell is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Powell Max Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Powell Max Limited 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 Powell Max. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Powell Max Limited has no effect on the direction of Citigroup i.e., Citigroup and Powell Max go up and down completely randomly.

Pair Corralation between Citigroup and Powell Max

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.26 times more return on investment than Powell Max. However, Citigroup is 3.9 times less risky than Powell Max. It trades about 0.14 of its potential returns per unit of risk. Powell Max Limited is currently generating about -0.04 per unit of risk. If you would invest  3,675  in Citigroup on September 19, 2024 and sell it today you would earn a total of  3,137  from holding Citigroup or generate 85.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	25.52%
Values	Daily Returns

Citigroup  vs.  Powell Max Limited

Citigroup

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Citigroup may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Powell Max Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Powell Max Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Citigroup and Powell Max

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

The idea behind Citigroup and Powell Max Limited 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.