Correlation Between Citigroup and Upright Growth

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

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

Diversification Opportunities for Citigroup and Upright Growth

0.7

Correlation Coefficient

Citigroup  Upright Growth

Poor diversification

The 3 months correlation between Citigroup and Upright is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Upright Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Upright Growth 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 Upright Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Upright Growth has no effect on the direction of Citigroup i.e., Citigroup and Upright Growth go up and down completely randomly.

Pair Corralation between Citigroup and Upright Growth

Taking into account the 90-day investment horizon Citigroup is expected to generate 3.19 times less return on investment than Upright Growth. But when comparing it to its historical volatility, Citigroup is 1.53 times less risky than Upright Growth. It trades about 0.03 of its potential returns per unit of risk. Upright Growth Fund is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,008  in Upright Growth Fund on December 4, 2024 and sell it today you would earn a total of  70.00  from holding Upright Growth Fund or generate 6.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.33%
Values	Daily Returns

Citigroup  vs.  Upright Growth Fund

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.

Upright Growth

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Upright Growth Fund are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Upright Growth may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Citigroup and Upright Growth

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

The idea behind Citigroup and Upright Growth Fund 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.