Correlation Between Citigroup and Wcm Small

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

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

Diversification Opportunities for Citigroup and Wcm Small

0.7

Correlation Coefficient

Citigroup  Wcm Small

Poor diversification

The 3 months correlation between Citigroup and Wcm is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Wcm Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wcm Small Cap 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 Wcm Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wcm Small Cap has no effect on the direction of Citigroup i.e., Citigroup and Wcm Small go up and down completely randomly.

Pair Corralation between Citigroup and Wcm Small

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.46 times more return on investment than Wcm Small. However, Citigroup is 1.46 times more volatile than Wcm Small Cap. It trades about 0.05 of its potential returns per unit of risk. Wcm Small Cap is currently generating about -0.11 per unit of risk. If you would invest  6,795  in Citigroup on December 19, 2024 and sell it today you would earn a total of  349.00  from holding Citigroup or generate 5.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.33%
Values	Daily Returns

Citigroup  vs.  Wcm Small Cap

Citigroup

Risk-Adjusted Performance

Weak

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.

Wcm Small Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Wcm Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Citigroup and Wcm Small

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

The idea behind Citigroup and Wcm Small Cap 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.