Correlation Between Citigroup and Sparinvest Investment

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

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

Diversification Opportunities for Citigroup and Sparinvest Investment

0.0

Correlation Coefficient

Citigroup  Sparinvest Investment

Pay attention - limited upside

The 3 months correlation between Citigroup and Sparinvest is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Sparinvest Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparinvest Investment 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 Sparinvest Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparinvest Investment has no effect on the direction of Citigroup i.e., Citigroup and Sparinvest Investment go up and down completely randomly.

Pair Corralation between Citigroup and Sparinvest Investment

If you would invest  7,101  in Citigroup on December 4, 2024 and sell it today you would earn a total of  616.00  from holding Citigroup or generate 8.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Citigroup  vs.  Sparinvest Investment

Citigroup

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 7 (%) 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.

Sparinvest Investment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sparinvest Investment has generated negative risk-adjusted returns adding no value to fund investors. Despite quite persistent forward indicators, Sparinvest Investment is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Citigroup and Sparinvest Investment

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

The idea behind Citigroup and Sparinvest Investment 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.