Correlation Between Citigroup and 11880 Solutions

Can any of the company-specific risk be diversified away by investing in both Citigroup and 11880 Solutions 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 11880 Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Citigroup and 11880 Solutions AG, you can compare the effects of market volatilities on Citigroup and 11880 Solutions 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 11880 Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and 11880 Solutions.

Diversification Opportunities for Citigroup and 11880 Solutions

0.08

Correlation Coefficient

Citigroup  11880 Solutions

Significant diversification

The 3 months correlation between Citigroup and 11880 is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and 11880 Solutions AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 11880 Solutions AG 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 11880 Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 11880 Solutions AG has no effect on the direction of Citigroup i.e., Citigroup and 11880 Solutions go up and down completely randomly.

Pair Corralation between Citigroup and 11880 Solutions

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.36 times more return on investment than 11880 Solutions. However, Citigroup is 2.76 times less risky than 11880 Solutions. It trades about 0.04 of its potential returns per unit of risk. 11880 Solutions AG is currently generating about -0.04 per unit of risk. If you would invest  6,929  in Citigroup on December 22, 2024 and sell it today you would earn a total of  269.00  from holding Citigroup or generate 3.88% return on investment over 90 days.

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

Citigroup  vs.  11880 Solutions AG

Citigroup

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 3 (%) 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.

11880 Solutions AG

Risk-Adjusted Performance

Very Weak

Over the last 90 days 11880 Solutions AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Citigroup and 11880 Solutions

The main advantage of trading using opposite Citigroup and 11880 Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, 11880 Solutions 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 11880 Solutions will offset losses from the drop in 11880 Solutions' long position.

The idea behind Citigroup and 11880 Solutions AG 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.