Correlation Between Citigroup and 78409VBK9

Can any of the company-specific risk be diversified away by investing in both Citigroup and 78409VBK9 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 78409VBK9 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Citigroup and SPGI 29 01 MAR 32, you can compare the effects of market volatilities on Citigroup and 78409VBK9 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 78409VBK9. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and 78409VBK9.

Diversification Opportunities for Citigroup and 78409VBK9

-0.37

Correlation Coefficient

Citigroup  78409VBK9

Very good diversification

The 3 months correlation between Citigroup and 78409VBK9 is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and SPGI 29 01 MAR 32 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPGI 29 01 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 78409VBK9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPGI 29 01 has no effect on the direction of Citigroup i.e., Citigroup and 78409VBK9 go up and down completely randomly.

Pair Corralation between Citigroup and 78409VBK9

Taking into account the 90-day investment horizon Citigroup is expected to generate 3.35 times more return on investment than 78409VBK9. However, Citigroup is 3.35 times more volatile than SPGI 29 01 MAR 32. It trades about 0.03 of its potential returns per unit of risk. SPGI 29 01 MAR 32 is currently generating about -0.06 per unit of risk. If you would invest  7,101  in Citigroup on October 14, 2024 and sell it today you would earn a total of  39.00  from holding Citigroup or generate 0.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.48%
Values	Daily Returns

Citigroup  vs.  SPGI 29 01 MAR 32

Citigroup

Risk-Adjusted Performance

6 of 100

Modest

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 uncertain fundamental indicators, Citigroup may actually be approaching a critical reversion point that can send shares even higher in February 2025.

SPGI 29 01

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SPGI 29 01 MAR 32 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 78409VBK9 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Citigroup and 78409VBK9

The main advantage of trading using opposite Citigroup and 78409VBK9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, 78409VBK9 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 78409VBK9 will offset losses from the drop in 78409VBK9's long position.

The idea behind Citigroup and SPGI 29 01 MAR 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.