Correlation Between Citigroup and HIMARK

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

By analyzing existing cross correlation between Citigroup and HIMARK 145 10 MAY 26, you can compare the effects of market volatilities on Citigroup and HIMARK 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 HIMARK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and HIMARK.

Diversification Opportunities for Citigroup and HIMARK

0.6

Correlation Coefficient

Citigroup  HIMARK

Poor diversification

The 3 months correlation between Citigroup and HIMARK is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and HIMARK 145 10 MAY 26 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HIMARK 145 10 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 HIMARK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HIMARK 145 10 has no effect on the direction of Citigroup i.e., Citigroup and HIMARK go up and down completely randomly.

Pair Corralation between Citigroup and HIMARK

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.96 times more return on investment than HIMARK. However, Citigroup is 1.96 times more volatile than HIMARK 145 10 MAY 26. It trades about 0.24 of its potential returns per unit of risk. HIMARK 145 10 MAY 26 is currently generating about -0.17 per unit of risk. If you would invest  6,360  in Citigroup on October 27, 2024 and sell it today you would earn a total of  1,788  from holding Citigroup or generate 28.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	33.33%
Values	Daily Returns

Citigroup  vs.  HIMARK 145 10 MAY 26

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.

HIMARK 145 10

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HIMARK 145 10 MAY 26 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 HIMARK 145 10 MAY 26 investors.

Pair Trading with Citigroup and HIMARK

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

The idea behind Citigroup and HIMARK 145 10 MAY 26 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.