Correlation Between Citigroup and 29670GAF9

Can any of the company-specific risk be diversified away by investing in both Citigroup and 29670GAF9 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 29670GAF9 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Citigroup and WTRG 24 01 MAY 31, you can compare the effects of market volatilities on Citigroup and 29670GAF9 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 29670GAF9. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and 29670GAF9.

Diversification Opportunities for Citigroup and 29670GAF9

-0.16

Correlation Coefficient

Citigroup  29670GAF9

Good diversification

The 3 months correlation between Citigroup and 29670GAF9 is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and WTRG 24 01 MAY 31 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WTRG 24 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 29670GAF9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WTRG 24 01 has no effect on the direction of Citigroup i.e., Citigroup and 29670GAF9 go up and down completely randomly.

Pair Corralation between Citigroup and 29670GAF9

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.65 times more return on investment than 29670GAF9. However, Citigroup is 1.65 times more volatile than WTRG 24 01 MAY 31. It trades about 0.05 of its potential returns per unit of risk. WTRG 24 01 MAY 31 is currently generating about -0.08 per unit of risk. If you would invest  7,086  in Citigroup on December 25, 2024 and sell it today you would earn a total of  361.00  from holding Citigroup or generate 5.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	58.33%
Values	Daily Returns

Citigroup  vs.  WTRG 24 01 MAY 31

Citigroup

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 4 (%) 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 April 2025.

WTRG 24 01

Risk-Adjusted Performance

Very Weak

Over the last 90 days WTRG 24 01 MAY 31 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 29670GAF9 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Citigroup and 29670GAF9

The main advantage of trading using opposite Citigroup and 29670GAF9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, 29670GAF9 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 29670GAF9 will offset losses from the drop in 29670GAF9's long position.

The idea behind Citigroup and WTRG 24 01 MAY 31 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.