Correlation Between Citigroup and Uniti

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

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

Diversification Opportunities for Citigroup and Uniti

-0.28

Correlation Coefficient

Citigroup  Uniti

Very good diversification

The 3 months correlation between Citigroup and Uniti is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Uniti Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uniti Group 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 Uniti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uniti Group has no effect on the direction of Citigroup i.e., Citigroup and Uniti go up and down completely randomly.

Pair Corralation between Citigroup and Uniti

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.68 times more return on investment than Uniti. However, Citigroup is 1.47 times less risky than Uniti. It trades about 0.12 of its potential returns per unit of risk. Uniti Group is currently generating about 0.01 per unit of risk. If you would invest  7,038  in Citigroup on November 28, 2024 and sell it today you would earn a total of  776.00  from holding Citigroup or generate 11.03% return on investment over 90 days.

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

Citigroup  vs.  Uniti Group

Citigroup

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Citigroup may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Uniti Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Uniti Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, Uniti is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Citigroup and Uniti

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

The idea behind Citigroup and Uniti Group 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.