Correlation Between Citigroup and 84859DAA5

Can any of the company-specific risk be diversified away by investing in both Citigroup and 84859DAA5 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 84859DAA5 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Citigroup and SR 33 01 JUN 51, you can compare the effects of market volatilities on Citigroup and 84859DAA5 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 84859DAA5. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and 84859DAA5.

Diversification Opportunities for Citigroup and 84859DAA5

0.46

Correlation Coefficient

Citigroup  84859DAA5

Very weak diversification

The 3 months correlation between Citigroup and 84859DAA5 is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and SR 33 01 JUN 51 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 84859DAA5 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 84859DAA5. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 84859DAA5 has no effect on the direction of Citigroup i.e., Citigroup and 84859DAA5 go up and down completely randomly.

Pair Corralation between Citigroup and 84859DAA5

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.63 times more return on investment than 84859DAA5. However, Citigroup is 1.59 times less risky than 84859DAA5. It trades about 0.13 of its potential returns per unit of risk. SR 33 01 JUN 51 is currently generating about -0.12 per unit of risk. If you would invest  7,090  in Citigroup on December 2, 2024 and sell it today you would earn a total of  905.00  from holding Citigroup or generate 12.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	21.31%
Values	Daily Returns

Citigroup  vs.  SR 33 01 JUN 51

Citigroup

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 10 (%) 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.

84859DAA5

Risk-Adjusted Performance

Very Weak

Over the last 90 days SR 33 01 JUN 51 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for SR 33 01 JUN 51 investors.

Pair Trading with Citigroup and 84859DAA5

The main advantage of trading using opposite Citigroup and 84859DAA5 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, 84859DAA5 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 84859DAA5 will offset losses from the drop in 84859DAA5's long position.

The idea behind Citigroup and SR 33 01 JUN 51 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.