Correlation Between Citigroup and Sn Hf

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

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

Diversification Opportunities for Citigroup and Sn Hf

0.5

Correlation Coefficient

Citigroup  Sn Hf

Very weak diversification

The 3 months correlation between Citigroup and SYN is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Sn hf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sn hf 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 Sn Hf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sn hf has no effect on the direction of Citigroup i.e., Citigroup and Sn Hf go up and down completely randomly.

Pair Corralation between Citigroup and Sn Hf

Taking into account the 90-day investment horizon Citigroup is expected to generate 2.21 times more return on investment than Sn Hf. However, Citigroup is 2.21 times more volatile than Sn hf. It trades about 0.45 of its potential returns per unit of risk. Sn hf is currently generating about -0.27 per unit of risk. If you would invest  6,842  in Citigroup on October 20, 2024 and sell it today you would earn a total of  1,157  from holding Citigroup or generate 16.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	85.0%
Values	Daily Returns

Citigroup  vs.  Sn hf

Citigroup

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 19 (%) 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.

Sn hf

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sn hf are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Sn Hf is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Citigroup and Sn Hf

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

The idea behind Citigroup and Sn hf 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.