Correlation Between Citigroup and Siit Equity

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

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

Diversification Opportunities for Citigroup and Siit Equity

0.86

Correlation Coefficient

Citigroup  Siit Equity

Very poor diversification

The 3 months correlation between Citigroup and Siit is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Siit Equity Factor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siit Equity Factor 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 Siit Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siit Equity Factor has no effect on the direction of Citigroup i.e., Citigroup and Siit Equity go up and down completely randomly.

Pair Corralation between Citigroup and Siit Equity

Taking into account the 90-day investment horizon Citigroup is expected to generate 2.23 times more return on investment than Siit Equity. However, Citigroup is 2.23 times more volatile than Siit Equity Factor. It trades about 0.05 of its potential returns per unit of risk. Siit Equity Factor is currently generating about -0.05 per unit of risk. If you would invest  6,795  in Citigroup on December 19, 2024 and sell it today you would earn a total of  349.00  from holding Citigroup or generate 5.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.33%
Values	Daily Returns

Citigroup  vs.  Siit Equity Factor

Citigroup

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 4 (%) 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.

Siit Equity Factor

Risk-Adjusted Performance

Very Weak

Over the last 90 days Siit Equity Factor has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Siit Equity 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 Siit Equity

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

The idea behind Citigroup and Siit Equity Factor 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.