Correlation Between Citigroup and Expat Slovenia

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

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

Diversification Opportunities for Citigroup and Expat Slovenia

0.77

Correlation Coefficient

Citigroup  Expat Slovenia

Poor diversification

The 3 months correlation between Citigroup and Expat is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Expat Slovenia SBI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expat Slovenia SBI 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 Expat Slovenia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Expat Slovenia SBI has no effect on the direction of Citigroup i.e., Citigroup and Expat Slovenia go up and down completely randomly.

Pair Corralation between Citigroup and Expat Slovenia

Taking into account the 90-day investment horizon Citigroup is expected to generate 3.25 times more return on investment than Expat Slovenia. However, Citigroup is 3.25 times more volatile than Expat Slovenia SBI. It trades about 0.17 of its potential returns per unit of risk. Expat Slovenia SBI is currently generating about 0.08 per unit of risk. If you would invest  5,877  in Citigroup on September 17, 2024 and sell it today you would earn a total of  1,272  from holding Citigroup or generate 21.64% return on investment over 90 days.

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

Citigroup  vs.  Expat Slovenia SBI

Citigroup

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Expat Slovenia SBI

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Expat Slovenia SBI are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Expat Slovenia is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Citigroup and Expat Slovenia

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

The idea behind Citigroup and Expat Slovenia SBI 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.