Correlation Between Citigroup and Wilmar International

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

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

Diversification Opportunities for Citigroup and Wilmar International

0.1

Correlation Coefficient

Citigroup  Wilmar International

Average diversification

The 3 months correlation between Citigroup and Wilmar is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Wilmar International Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilmar International 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 Wilmar International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilmar International has no effect on the direction of Citigroup i.e., Citigroup and Wilmar International go up and down completely randomly.

Pair Corralation between Citigroup and Wilmar International

Taking into account the 90-day investment horizon Citigroup is expected to generate 2.16 times less return on investment than Wilmar International. But when comparing it to its historical volatility, Citigroup is 1.08 times less risky than Wilmar International. It trades about 0.03 of its potential returns per unit of risk. Wilmar International Limited is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  211.00  in Wilmar International Limited on December 29, 2024 and sell it today you would earn a total of  16.00  from holding Wilmar International Limited or generate 7.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

Citigroup  vs.  Wilmar International Limited

Citigroup

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 2 (%) 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.

Wilmar International

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Wilmar International Limited are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain technical indicators, Wilmar International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Citigroup and Wilmar International

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

The idea behind Citigroup and Wilmar International 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.

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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.