Correlation Between Citigroup and Reynaldos Mexican

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

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

Diversification Opportunities for Citigroup and Reynaldos Mexican

0.0

Correlation Coefficient

Citigroup  Reynaldos Mexican

Pay attention - limited upside

The 3 months correlation between Citigroup and Reynaldos is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Reynaldos Mexican Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reynaldos Mexican Food 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 Reynaldos Mexican. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reynaldos Mexican Food has no effect on the direction of Citigroup i.e., Citigroup and Reynaldos Mexican go up and down completely randomly.

Pair Corralation between Citigroup and Reynaldos Mexican

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.25 times more return on investment than Reynaldos Mexican. However, Citigroup is 4.03 times less risky than Reynaldos Mexican. It trades about 0.11 of its potential returns per unit of risk. Reynaldos Mexican Food is currently generating about -0.09 per unit of risk. If you would invest  5,817  in Citigroup on December 5, 2024 and sell it today you would earn a total of  1,479  from holding Citigroup or generate 25.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Citigroup  vs.  Reynaldos Mexican Food

Citigroup

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 1 (%) 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 recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Reynaldos Mexican Food

Risk-Adjusted Performance

Very Weak

Over the last 90 days Reynaldos Mexican Food has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Reynaldos Mexican is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Citigroup and Reynaldos Mexican

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

The idea behind Citigroup and Reynaldos Mexican Food 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.