Correlation Between Citigroup and 05329WAR3

Can any of the company-specific risk be diversified away by investing in both Citigroup and 05329WAR3 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 05329WAR3 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Citigroup and AN 195 01 AUG 28, you can compare the effects of market volatilities on Citigroup and 05329WAR3 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 05329WAR3. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and 05329WAR3.

Diversification Opportunities for Citigroup and 05329WAR3

0.34

Correlation Coefficient

Citigroup  05329WAR3

Weak diversification

The 3 months correlation between Citigroup and 05329WAR3 is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and AN 195 01 AUG 28 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AN 195 01 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 05329WAR3. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AN 195 01 has no effect on the direction of Citigroup i.e., Citigroup and 05329WAR3 go up and down completely randomly.

Pair Corralation between Citigroup and 05329WAR3

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.57 times more return on investment than 05329WAR3. However, Citigroup is 1.57 times more volatile than AN 195 01 AUG 28. It trades about 0.4 of its potential returns per unit of risk. AN 195 01 AUG 28 is currently generating about -0.31 per unit of risk. If you would invest  7,135  in Citigroup on October 26, 2024 and sell it today you would earn a total of  1,034  from holding Citigroup or generate 14.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	90.0%
Values	Daily Returns

Citigroup  vs.  AN 195 01 AUG 28

Citigroup

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 19 (%) 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.

AN 195 01

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AN 195 01 AUG 28 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for AN 195 01 AUG 28 investors.

Pair Trading with Citigroup and 05329WAR3

The main advantage of trading using opposite Citigroup and 05329WAR3 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, 05329WAR3 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 05329WAR3 will offset losses from the drop in 05329WAR3's long position.

The idea behind Citigroup and AN 195 01 AUG 28 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.