Correlation Between Citigroup and Ether Fund

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

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

Diversification Opportunities for Citigroup and Ether Fund

0.72

Correlation Coefficient

Citigroup  Ether Fund

Poor diversification

The 3 months correlation between Citigroup and Ether is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Ether Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ether 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 Ether Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ether Fund has no effect on the direction of Citigroup i.e., Citigroup and Ether Fund go up and down completely randomly.

Pair Corralation between Citigroup and Ether Fund

Taking into account the 90-day investment horizon Citigroup is expected to generate 8.38 times less return on investment than Ether Fund. But when comparing it to its historical volatility, Citigroup is 7.11 times less risky than Ether Fund. It trades about 0.06 of its potential returns per unit of risk. Ether Fund is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  2,569  in Ether Fund on October 13, 2024 and sell it today you would earn a total of  2,525  from holding Ether Fund or generate 98.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	97.98%
Values	Daily Returns

Citigroup  vs.  Ether Fund

Citigroup

Risk-Adjusted Performance

6 of 100

Modest

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 uncertain fundamental indicators, Citigroup may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Ether Fund

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ether Fund are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Ether Fund sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Ether Fund

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

The idea behind Citigroup and Ether 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.