Correlation Between Citigroup and Procure Space

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

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

Diversification Opportunities for Citigroup and Procure Space

0.94

Correlation Coefficient

Citigroup  Procure Space

Almost no diversification

The 3 months correlation between Citigroup and Procure is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Procure Space ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Procure Space ETF 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 Procure Space. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Procure Space ETF has no effect on the direction of Citigroup i.e., Citigroup and Procure Space go up and down completely randomly.

Pair Corralation between Citigroup and Procure Space

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.23 times less return on investment than Procure Space. In addition to that, Citigroup is 1.2 times more volatile than Procure Space ETF. It trades about 0.16 of its total potential returns per unit of risk. Procure Space ETF is currently generating about 0.23 per unit of volatility. If you would invest  1,858  in Procure Space ETF on September 18, 2024 and sell it today you would earn a total of  477.00  from holding Procure Space ETF or generate 25.67% 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.  Procure Space ETF

Citigroup

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 12 (%) 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.

Procure Space ETF

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Procure Space ETF are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain technical and fundamental indicators, Procure Space displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Procure Space

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

The idea behind Citigroup and Procure Space ETF 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.