Correlation Between Citigroup and SYSCO

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

By analyzing existing cross correlation between Citigroup and SYSCO P 5375, you can compare the effects of market volatilities on Citigroup and SYSCO 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 SYSCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and SYSCO.

Diversification Opportunities for Citigroup and SYSCO

-0.61

Correlation Coefficient

Citigroup  SYSCO

Excellent diversification

The 3 months correlation between Citigroup and SYSCO is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and SYSCO P 5375 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SYSCO P 5375 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 SYSCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SYSCO P 5375 has no effect on the direction of Citigroup i.e., Citigroup and SYSCO go up and down completely randomly.

Pair Corralation between Citigroup and SYSCO

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.38 times more return on investment than SYSCO. However, Citigroup is 1.38 times more volatile than SYSCO P 5375. It trades about 0.15 of its potential returns per unit of risk. SYSCO P 5375 is currently generating about -0.01 per unit of risk. If you would invest  6,010  in Citigroup on September 5, 2024 and sell it today you would earn a total of  1,132  from holding Citigroup or generate 18.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	69.84%
Values	Daily Returns

Citigroup  vs.  SYSCO P 5375

Citigroup

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 11 (%) 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.

SYSCO P 5375

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SYSCO P 5375 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, SYSCO is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Citigroup and SYSCO

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

The idea behind Citigroup and SYSCO P 5375 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.

Check out your portfolio center.

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 Anywhere module to track or share privately all of your investments from the convenience of any device.