Correlation Between Citigroup and SuRo Capital

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

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

Diversification Opportunities for Citigroup and SuRo Capital

0.07

Correlation Coefficient

Citigroup  SuRo Capital

Significant diversification

The 3 months correlation between Citigroup and SuRo is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and SuRo Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SuRo Capital Corp 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 SuRo Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SuRo Capital Corp has no effect on the direction of Citigroup i.e., Citigroup and SuRo Capital go up and down completely randomly.

Pair Corralation between Citigroup and SuRo Capital

Taking into account the 90-day investment horizon Citigroup is expected to under-perform the SuRo Capital. But the stock apears to be less risky and, when comparing its historical volatility, Citigroup is 2.72 times less risky than SuRo Capital. The stock trades about -0.2 of its potential returns per unit of risk. The SuRo Capital Corp is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  523.00  in SuRo Capital Corp on December 4, 2024 and sell it today you would earn a total of  72.00  from holding SuRo Capital Corp or generate 13.77% return on investment over 90 days.

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

Citigroup  vs.  SuRo Capital Corp

Citigroup

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Citigroup is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

SuRo Capital Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SuRo Capital Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, SuRo Capital may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Citigroup and SuRo Capital

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

The idea behind Citigroup and SuRo Capital Corp 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.