Correlation Between Citigroup and School Specialty

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

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

Diversification Opportunities for Citigroup and School Specialty

0.0

Correlation Coefficient

Citigroup  School Specialty

Pay attention - limited upside

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

Pair Corralation between Citigroup and School Specialty

If you would invest  0.01  in School Specialty on September 23, 2024 and sell it today you would earn a total of  0.00  from holding School Specialty or generate 0.0% return on investment over 90 days.

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

Citigroup  vs.  School Specialty

Citigroup

Risk-Adjusted Performance

7 of 100

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

School Specialty

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days School Specialty has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, School Specialty is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Citigroup and School Specialty

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

The idea behind Citigroup and School Specialty 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.