Correlation Between Citigroup and Kraken Robotics

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

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

Diversification Opportunities for Citigroup and Kraken Robotics

0.14

Correlation Coefficient

Citigroup  Kraken Robotics

Average diversification

The 3 months correlation between Citigroup and Kraken is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Kraken Robotics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kraken Robotics 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 Kraken Robotics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kraken Robotics has no effect on the direction of Citigroup i.e., Citigroup and Kraken Robotics go up and down completely randomly.

Pair Corralation between Citigroup and Kraken Robotics

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.55 times more return on investment than Kraken Robotics. However, Citigroup is 1.81 times less risky than Kraken Robotics. It trades about -0.2 of its potential returns per unit of risk. Kraken Robotics is currently generating about -0.23 per unit of risk. If you would invest  7,961  in Citigroup on December 4, 2024 and sell it today you would lose (764.50) from holding Citigroup or give up 9.6% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Citigroup  vs.  Kraken Robotics

Citigroup

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 7 (%) 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 April 2025.

Kraken Robotics

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Citigroup and Kraken Robotics

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

The idea behind Citigroup and Kraken Robotics 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.