Correlation Between Citigroup and 902973BC9

Can any of the company-specific risk be diversified away by investing in both Citigroup and 902973BC9 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 902973BC9 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Citigroup and USB 37, you can compare the effects of market volatilities on Citigroup and 902973BC9 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 902973BC9. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and 902973BC9.

Diversification Opportunities for Citigroup and 902973BC9

0.15

Correlation Coefficient

Citigroup  902973BC9

Average diversification

The 3 months correlation between Citigroup and 902973BC9 is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and USB 37 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 902973BC9 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 902973BC9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 902973BC9 has no effect on the direction of Citigroup i.e., Citigroup and 902973BC9 go up and down completely randomly.

Pair Corralation between Citigroup and 902973BC9

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.1 times more return on investment than 902973BC9. However, Citigroup is 1.1 times more volatile than USB 37. It trades about 0.05 of its potential returns per unit of risk. USB 37 is currently generating about -0.16 per unit of risk. If you would invest  7,086  in Citigroup on December 26, 2024 and sell it today you would earn a total of  361.00  from holding Citigroup or generate 5.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

Citigroup  vs.  USB 37

Citigroup

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 4 (%) 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 April 2025.

902973BC9

Risk-Adjusted Performance

Very Weak

Over the last 90 days USB 37 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating 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 USB 37 investors.

Pair Trading with Citigroup and 902973BC9

The main advantage of trading using opposite Citigroup and 902973BC9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, 902973BC9 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 902973BC9 will offset losses from the drop in 902973BC9's long position.

The idea behind Citigroup and USB 37 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.