Correlation Between Citigroup and Shimmick Common

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

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

Diversification Opportunities for Citigroup and Shimmick Common

0.5

Correlation Coefficient

Citigroup  Shimmick Common

Very weak diversification

The 3 months correlation between Citigroup and Shimmick is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Shimmick Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shimmick Common 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 Shimmick Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shimmick Common has no effect on the direction of Citigroup i.e., Citigroup and Shimmick Common go up and down completely randomly.

Pair Corralation between Citigroup and Shimmick Common

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.32 times more return on investment than Shimmick Common. However, Citigroup is 3.13 times less risky than Shimmick Common. It trades about 0.14 of its potential returns per unit of risk. Shimmick Common is currently generating about 0.03 per unit of risk. If you would invest  6,077  in Citigroup on October 3, 2024 and sell it today you would earn a total of  962.00  from holding Citigroup or generate 15.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Citigroup  vs.  Shimmick Common

Citigroup

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Shimmick Common

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Shimmick Common are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady forward indicators, Shimmick Common may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Citigroup and Shimmick Common

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

The idea behind Citigroup and Shimmick Common 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.