Correlation Between Citigroup and RYU Apparel

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

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

Diversification Opportunities for Citigroup and RYU Apparel

-0.42

Correlation Coefficient

Citigroup  RYU Apparel

Very good diversification

The 3 months correlation between Citigroup and RYU is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and RYU Apparel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RYU Apparel 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 RYU Apparel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RYU Apparel has no effect on the direction of Citigroup i.e., Citigroup and RYU Apparel go up and down completely randomly.

Pair Corralation between Citigroup and RYU Apparel

If you would invest  7,135  in Citigroup on October 26, 2024 and sell it today you would earn a total of  1,034  from holding Citigroup or generate 14.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	5.56%
Values	Daily Returns

Citigroup  vs.  RYU Apparel

Citigroup

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 19 (%) 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.

RYU Apparel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RYU Apparel has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, RYU Apparel is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Citigroup and RYU Apparel

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

The idea behind Citigroup and RYU Apparel 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.

Check out your portfolio center.

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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.