Correlation Between Citigroup and 40434LAL9

Can any of the company-specific risk be diversified away by investing in both Citigroup and 40434LAL9 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 40434LAL9 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Citigroup and HPQ 42 15 APR 32, you can compare the effects of market volatilities on Citigroup and 40434LAL9 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 40434LAL9. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and 40434LAL9.

Diversification Opportunities for Citigroup and 40434LAL9

-0.38

Correlation Coefficient

Citigroup  40434LAL9

Very good diversification

The 3 months correlation between Citigroup and 40434LAL9 is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and HPQ 42 15 APR 32 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HPQ 42 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 40434LAL9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HPQ 42 15 has no effect on the direction of Citigroup i.e., Citigroup and 40434LAL9 go up and down completely randomly.

Pair Corralation between Citigroup and 40434LAL9

Taking into account the 90-day investment horizon Citigroup is expected to generate 2.93 times more return on investment than 40434LAL9. However, Citigroup is 2.93 times more volatile than HPQ 42 15 APR 32. It trades about 0.07 of its potential returns per unit of risk. HPQ 42 15 APR 32 is currently generating about -0.05 per unit of risk. If you would invest  6,334  in Citigroup on October 10, 2024 and sell it today you would earn a total of  1,034  from holding Citigroup or generate 16.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Citigroup  vs.  HPQ 42 15 APR 32

Citigroup

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 11 (%) 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.

HPQ 42 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HPQ 42 15 APR 32 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting 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 HPQ 42 15 APR 32 investors.

Pair Trading with Citigroup and 40434LAL9

The main advantage of trading using opposite Citigroup and 40434LAL9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, 40434LAL9 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 40434LAL9 will offset losses from the drop in 40434LAL9's long position.

The idea behind Citigroup and HPQ 42 15 APR 32 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.