Correlation Between Citigroup and EXPRESS

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

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

Diversification Opportunities for Citigroup and EXPRESS

-0.33

Correlation Coefficient

Citigroup  EXPRESS

Very good diversification

The 3 months correlation between Citigroup and EXPRESS is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and EXPRESS SCRIPTS HLDG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EXPRESS SCRIPTS HLDG 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 EXPRESS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EXPRESS SCRIPTS HLDG has no effect on the direction of Citigroup i.e., Citigroup and EXPRESS go up and down completely randomly.

Pair Corralation between Citigroup and EXPRESS

Taking into account the 90-day investment horizon Citigroup is expected to generate 3.09 times more return on investment than EXPRESS. However, Citigroup is 3.09 times more volatile than EXPRESS SCRIPTS HLDG. It trades about 0.13 of its potential returns per unit of risk. EXPRESS SCRIPTS HLDG is currently generating about -0.07 per unit of risk. If you would invest  6,356  in Citigroup on October 9, 2024 and sell it today you would earn a total of  918.00  from holding Citigroup or generate 14.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	88.52%
Values	Daily Returns

Citigroup  vs.  EXPRESS SCRIPTS HLDG

Citigroup

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 10 (%) 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.

EXPRESS SCRIPTS HLDG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EXPRESS SCRIPTS HLDG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, EXPRESS is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Citigroup and EXPRESS

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

The idea behind Citigroup and EXPRESS SCRIPTS HLDG 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.