Correlation Between Citigroup and 887317AS4

Can any of the company-specific risk be diversified away by investing in both Citigroup and 887317AS4 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 887317AS4 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Citigroup and TIME WARNER INC, you can compare the effects of market volatilities on Citigroup and 887317AS4 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 887317AS4. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and 887317AS4.

Diversification Opportunities for Citigroup and 887317AS4

-0.2

Correlation Coefficient

Citigroup  887317AS4

Good diversification

The 3 months correlation between Citigroup and 887317AS4 is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and TIME WARNER INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TIME WARNER INC 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 887317AS4. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TIME WARNER INC has no effect on the direction of Citigroup i.e., Citigroup and 887317AS4 go up and down completely randomly.

Pair Corralation between Citigroup and 887317AS4

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.29 times more return on investment than 887317AS4. However, Citigroup is 3.42 times less risky than 887317AS4. It trades about 0.12 of its potential returns per unit of risk. TIME WARNER INC is currently generating about -0.03 per unit of risk. If you would invest  7,038  in Citigroup on November 28, 2024 and sell it today you would earn a total of  776.00  from holding Citigroup or generate 11.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	25.86%
Values	Daily Returns

Citigroup  vs.  TIME WARNER INC

Citigroup

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 9 (%) 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 March 2025.

TIME WARNER INC

Risk-Adjusted Performance

Very Weak

Over the last 90 days TIME WARNER INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for TIME WARNER INC investors.

Pair Trading with Citigroup and 887317AS4

The main advantage of trading using opposite Citigroup and 887317AS4 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, 887317AS4 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 887317AS4 will offset losses from the drop in 887317AS4's long position.

The idea behind Citigroup and TIME WARNER INC 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.