Correlation Between Citigroup and Qs Sp

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

By analyzing existing cross correlation between Citigroup and Qs Sp 500, you can compare the effects of market volatilities on Citigroup and Qs Sp 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 Qs Sp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Qs Sp.

Diversification Opportunities for Citigroup and Qs Sp

0.43

Correlation Coefficient

Citigroup  Qs Sp

Very weak diversification

The 3 months correlation between Citigroup and SBSDX is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Qs Sp 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qs Sp 500 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 Qs Sp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qs Sp 500 has no effect on the direction of Citigroup i.e., Citigroup and Qs Sp go up and down completely randomly.

Pair Corralation between Citigroup and Qs Sp

Taking into account the 90-day investment horizon Citigroup is expected to under-perform the Qs Sp. In addition to that, Citigroup is 2.56 times more volatile than Qs Sp 500. It trades about -0.2 of its total potential returns per unit of risk. Qs Sp 500 is currently generating about -0.13 per unit of volatility. If you would invest  4,681  in Qs Sp 500 on December 4, 2024 and sell it today you would lose (109.00) from holding Qs Sp 500 or give up 2.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Citigroup  vs.  Qs Sp 500

Citigroup

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Citigroup may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Qs Sp 500

Risk-Adjusted Performance

Very Weak

Over the last 90 days Qs Sp 500 has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Qs Sp is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Citigroup and Qs Sp

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

The idea behind Citigroup and Qs Sp 500 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.