Correlation Between Citigroup and Priorityome Fund

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

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

Diversification Opportunities for Citigroup and Priorityome Fund

-0.33

Correlation Coefficient

Citigroup  Priorityome Fund

Very good diversification

The 3 months correlation between Citigroup and Priorityome is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Priorityome Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Priorityome Fund 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 Priorityome Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Priorityome Fund has no effect on the direction of Citigroup i.e., Citigroup and Priorityome Fund go up and down completely randomly.

Pair Corralation between Citigroup and Priorityome Fund

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.53 times more return on investment than Priorityome Fund. However, Citigroup is 1.53 times more volatile than Priorityome Fund. It trades about 0.24 of its potential returns per unit of risk. Priorityome Fund is currently generating about -0.03 per unit of risk. If you would invest  6,245  in Citigroup on October 24, 2024 and sell it today you would earn a total of  1,754  from holding Citigroup or generate 28.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Citigroup  vs.  Priorityome Fund

Citigroup

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 18 (%) 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.

Priorityome Fund

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Priorityome Fund has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Priorityome Fund is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Citigroup and Priorityome Fund

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

The idea behind Citigroup and Priorityome Fund 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 Transaction History module to view history of all your transactions and understand their impact on performance.