Correlation Between Citigroup and NBCUNIVERSAL

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

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

Diversification Opportunities for Citigroup and NBCUNIVERSAL

-0.62

Correlation Coefficient

Citigroup  NBCUNIVERSAL

Excellent diversification

The 3 months correlation between Citigroup and NBCUNIVERSAL is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and NBCUNIVERSAL MEDIA LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NBCUNIVERSAL MEDIA LLC 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 NBCUNIVERSAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NBCUNIVERSAL MEDIA LLC has no effect on the direction of Citigroup i.e., Citigroup and NBCUNIVERSAL go up and down completely randomly.

Pair Corralation between Citigroup and NBCUNIVERSAL

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.46 times more return on investment than NBCUNIVERSAL. However, Citigroup is 1.46 times more volatile than NBCUNIVERSAL MEDIA LLC. It trades about 0.07 of its potential returns per unit of risk. NBCUNIVERSAL MEDIA LLC is currently generating about -0.08 per unit of risk. If you would invest  5,890  in Citigroup on September 19, 2024 and sell it today you would earn a total of  922.00  from holding Citigroup or generate 15.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	80.16%
Values	Daily Returns

Citigroup  vs.  NBCUNIVERSAL MEDIA LLC

Citigroup

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 6 (%) 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.

NBCUNIVERSAL MEDIA LLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NBCUNIVERSAL MEDIA LLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for NBCUNIVERSAL MEDIA LLC investors.

Pair Trading with Citigroup and NBCUNIVERSAL

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

The idea behind Citigroup and NBCUNIVERSAL MEDIA LLC 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.