Correlation Between Citigroup and Sky ICT

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

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

Diversification Opportunities for Citigroup and Sky ICT

0.33

Correlation Coefficient

Citigroup  Sky ICT

Weak diversification

The 3 months correlation between Citigroup and Sky is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Sky ICT Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sky ICT 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 Sky ICT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sky ICT Public has no effect on the direction of Citigroup i.e., Citigroup and Sky ICT go up and down completely randomly.

Pair Corralation between Citigroup and Sky ICT

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.48 times more return on investment than Sky ICT. However, Citigroup is 2.06 times less risky than Sky ICT. It trades about 0.04 of its potential returns per unit of risk. Sky ICT Public is currently generating about 0.01 per unit of risk. If you would invest  7,250  in Citigroup on October 11, 2024 and sell it today you would earn a total of  76.00  from holding Citigroup or generate 1.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	90.48%
Values	Daily Returns

Citigroup  vs.  Sky ICT Public

Citigroup

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Sky ICT Public

Risk-Adjusted Performance

1 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sky ICT Public are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Sky ICT is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Citigroup and Sky ICT

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

The idea behind Citigroup and Sky ICT 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.

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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.