Correlation Between Citigroup and RADIATE

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

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

Diversification Opportunities for Citigroup and RADIATE

0.02

Correlation Coefficient

Citigroup  RADIATE

Significant diversification

The 3 months correlation between Citigroup and RADIATE is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and RADIATE HOLDCO LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RADIATE HOLDCO 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 RADIATE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RADIATE HOLDCO LLC has no effect on the direction of Citigroup i.e., Citigroup and RADIATE go up and down completely randomly.

Pair Corralation between Citigroup and RADIATE

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.39 times more return on investment than RADIATE. However, Citigroup is 2.56 times less risky than RADIATE. It trades about 0.17 of its potential returns per unit of risk. RADIATE HOLDCO LLC is currently generating about -0.17 per unit of risk. If you would invest  5,877  in Citigroup on September 17, 2024 and sell it today you would earn a total of  1,272  from holding Citigroup or generate 21.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	50.77%
Values	Daily Returns

Citigroup  vs.  RADIATE HOLDCO LLC

Citigroup

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 13 (%) 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.

RADIATE HOLDCO LLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RADIATE HOLDCO LLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting 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 RADIATE HOLDCO LLC investors.

Pair Trading with Citigroup and RADIATE

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

The idea behind Citigroup and RADIATE HOLDCO 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.