Correlation Between Citigroup and NOVHOL

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

By analyzing existing cross correlation between Citigroup and NOVHOL 6625 15 APR 29, you can compare the effects of market volatilities on Citigroup and NOVHOL 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 NOVHOL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and NOVHOL.

Diversification Opportunities for Citigroup and NOVHOL

-0.38

Correlation Coefficient

Citigroup  NOVHOL

Very good diversification

The 3 months correlation between Citigroup and NOVHOL is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and NOVHOL 6625 15 APR 29 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOVHOL 6625 15 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 NOVHOL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NOVHOL 6625 15 has no effect on the direction of Citigroup i.e., Citigroup and NOVHOL go up and down completely randomly.

Pair Corralation between Citigroup and NOVHOL

Taking into account the 90-day investment horizon Citigroup is expected to generate 4.3 times more return on investment than NOVHOL. However, Citigroup is 4.3 times more volatile than NOVHOL 6625 15 APR 29. It trades about 0.06 of its potential returns per unit of risk. NOVHOL 6625 15 APR 29 is currently generating about -0.16 per unit of risk. If you would invest  6,828  in Citigroup on September 21, 2024 and sell it today you would earn a total of  91.00  from holding Citigroup or generate 1.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Citigroup  vs.  NOVHOL 6625 15 APR 29

Citigroup

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 7 (%) 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 January 2025.

NOVHOL 6625 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NOVHOL 6625 15 APR 29 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating 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 NOVHOL 6625 15 APR 29 investors.

Pair Trading with Citigroup and NOVHOL

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

The idea behind Citigroup and NOVHOL 6625 15 APR 29 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.

Check out your portfolio center.

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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.