Correlation Between Citigroup and SUN

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

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

Diversification Opportunities for Citigroup and SUN

-0.78

Correlation Coefficient

Citigroup  SUN

Pay attention - limited upside

The 3 months correlation between Citigroup and SUN is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and SUN LIMITED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUN LIMITED 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 SUN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUN LIMITED has no effect on the direction of Citigroup i.e., Citigroup and SUN go up and down completely randomly.

Pair Corralation between Citigroup and SUN

Taking into account the 90-day investment horizon Citigroup is expected to under-perform the SUN. In addition to that, Citigroup is 1.16 times more volatile than SUN LIMITED. It trades about -0.09 of its total potential returns per unit of risk. SUN LIMITED is currently generating about 0.21 per unit of volatility. If you would invest  3,850  in SUN LIMITED on September 25, 2024 and sell it today you would earn a total of  170.00  from holding SUN LIMITED or generate 4.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Citigroup  vs.  SUN LIMITED

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 uncertain fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

SUN LIMITED

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SUN LIMITED has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's primary indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Citigroup and SUN

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

The idea behind Citigroup and SUN LIMITED 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.