Correlation Between Citigroup and NForce Secure

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

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

Diversification Opportunities for Citigroup and NForce Secure

-0.75

Correlation Coefficient

Citigroup  NForce Secure

Pay attention - limited upside

The 3 months correlation between Citigroup and NForce is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and nForce Secure Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on nForce Secure Public 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 NForce Secure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of nForce Secure Public has no effect on the direction of Citigroup i.e., Citigroup and NForce Secure go up and down completely randomly.

Pair Corralation between Citigroup and NForce Secure

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.84 times more return on investment than NForce Secure. However, Citigroup is 1.18 times less risky than NForce Secure. It trades about 0.03 of its potential returns per unit of risk. nForce Secure Public is currently generating about -0.18 per unit of risk. If you would invest  7,101  in Citigroup on October 14, 2024 and sell it today you would earn a total of  39.00  from holding Citigroup or generate 0.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.0%
Values	Daily Returns

Citigroup  vs.  nForce Secure Public

Citigroup

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental indicators, Citigroup may actually be approaching a critical reversion point that can send shares even higher in February 2025.

nForce Secure Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days nForce Secure Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Citigroup and NForce Secure

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

The idea behind Citigroup and nForce Secure Public 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.