Correlation Between Citigroup and Timothy Largemip

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

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

Diversification Opportunities for Citigroup and Timothy Largemip

-0.18

Correlation Coefficient

Citigroup  Timothy Largemip

Good diversification

The 3 months correlation between Citigroup and Timothy is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Timothy Largemip Cap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timothy Largemip Cap 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 Largemip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Timothy Largemip Cap has no effect on the direction of Citigroup i.e., Citigroup and Timothy Largemip go up and down completely randomly.

Pair Corralation between Citigroup and Timothy Largemip

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.51 times more return on investment than Timothy Largemip. However, Citigroup is 1.51 times more volatile than Timothy Largemip Cap Growth. It trades about 0.08 of its potential returns per unit of risk. Timothy Largemip Cap Growth is currently generating about 0.07 per unit of risk. If you would invest  4,142  in Citigroup on December 4, 2024 and sell it today you would earn a total of  3,054  from holding Citigroup or generate 73.74% return on investment over 90 days.

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

Citigroup  vs.  Timothy Largemip Cap Growth

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.

Timothy Largemip Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Timothy Largemip Cap Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's forward indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Citigroup and Timothy Largemip

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

The idea behind Citigroup and Timothy Largemip Cap Growth 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.