Correlation Between Citigroup and 91324PEQ1

Can any of the company-specific risk be diversified away by investing in both Citigroup and 91324PEQ1 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 91324PEQ1 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Citigroup and UNH 53 15 FEB 30, you can compare the effects of market volatilities on Citigroup and 91324PEQ1 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 91324PEQ1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and 91324PEQ1.

Diversification Opportunities for Citigroup and 91324PEQ1

-0.65

Correlation Coefficient

Citigroup  91324PEQ1

Excellent diversification

The 3 months correlation between Citigroup and 91324PEQ1 is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and UNH 53 15 FEB 30 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNH 53 15 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 91324PEQ1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNH 53 15 has no effect on the direction of Citigroup i.e., Citigroup and 91324PEQ1 go up and down completely randomly.

Pair Corralation between Citigroup and 91324PEQ1

Taking into account the 90-day investment horizon Citigroup is expected to generate 7.02 times more return on investment than 91324PEQ1. However, Citigroup is 7.02 times more volatile than UNH 53 15 FEB 30. It trades about 0.16 of its potential returns per unit of risk. UNH 53 15 FEB 30 is currently generating about -0.25 per unit of risk. If you would invest  5,937  in Citigroup on September 18, 2024 and sell it today you would earn a total of  1,175  from holding Citigroup or generate 19.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	96.88%
Values	Daily Returns

Citigroup  vs.  UNH 53 15 FEB 30

Citigroup

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 12 (%) 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.

UNH 53 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UNH 53 15 FEB 30 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 91324PEQ1 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 91324PEQ1

The main advantage of trading using opposite Citigroup and 91324PEQ1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, 91324PEQ1 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 91324PEQ1 will offset losses from the drop in 91324PEQ1's long position.

The idea behind Citigroup and UNH 53 15 FEB 30 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.