Correlation Between Citigroup and Timothy Israel

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

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

Diversification Opportunities for Citigroup and Timothy Israel

0.93

Correlation Coefficient

Citigroup  Timothy Israel

Almost no diversification

The 3 months correlation between Citigroup and Timothy is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Timothy Israel Mon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timothy Israel Mon 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 Timothy Israel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Timothy Israel Mon has no effect on the direction of Citigroup i.e., Citigroup and Timothy Israel go up and down completely randomly.

Pair Corralation between Citigroup and Timothy Israel

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.85 times more return on investment than Timothy Israel. However, Citigroup is 1.85 times more volatile than Timothy Israel Mon. It trades about 0.18 of its potential returns per unit of risk. Timothy Israel Mon is currently generating about 0.28 per unit of risk. If you would invest  5,788  in Citigroup on September 14, 2024 and sell it today you would earn a total of  1,313  from holding Citigroup or generate 22.68% return on investment over 90 days.

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

Citigroup  vs.  Timothy Israel Mon

Citigroup

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 13 (%) 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.

Timothy Israel Mon

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Timothy Israel Mon are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Timothy Israel showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Timothy Israel

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

The idea behind Citigroup and Timothy Israel Mon 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.