Correlation Between Citigroup and Amundi SP

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

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

Diversification Opportunities for Citigroup and Amundi SP

0.85

Correlation Coefficient

Citigroup  Amundi SP

Very poor diversification

The 3 months correlation between Citigroup and Amundi is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Amundi SP Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi SP Global 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 Amundi SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi SP Global has no effect on the direction of Citigroup i.e., Citigroup and Amundi SP go up and down completely randomly.

Pair Corralation between Citigroup and Amundi SP

Taking into account the 90-day investment horizon Citigroup is expected to under-perform the Amundi SP. But the stock apears to be less risky and, when comparing its historical volatility, Citigroup is 1.04 times less risky than Amundi SP. The stock trades about -0.05 of its potential returns per unit of risk. The Amundi SP Global is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  1,366  in Amundi SP Global on October 4, 2024 and sell it today you would earn a total of  50.00  from holding Amundi SP Global or generate 3.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	85.71%
Values	Daily Returns

Citigroup  vs.  Amundi SP Global

Citigroup

Risk-Adjusted Performance

9 of 100

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 unsteady fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Amundi SP Global

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amundi SP Global are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile forward-looking indicators, Amundi SP exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Amundi SP

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

The idea behind Citigroup and Amundi SP Global 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.