Correlation Between Citigroup and Zentalis Pharmaceuticals

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

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

Diversification Opportunities for Citigroup and Zentalis Pharmaceuticals

-0.81

Correlation Coefficient

Citigroup  Zentalis Pharmaceuticals

Pay attention - limited upside

The 3 months correlation between Citigroup and Zentalis is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Zentalis Pharmaceuticals Llc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zentalis Pharmaceuticals 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 Zentalis Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zentalis Pharmaceuticals has no effect on the direction of Citigroup i.e., Citigroup and Zentalis Pharmaceuticals go up and down completely randomly.

Pair Corralation between Citigroup and Zentalis Pharmaceuticals

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.16 times more return on investment than Zentalis Pharmaceuticals. However, Citigroup is 6.12 times less risky than Zentalis Pharmaceuticals. It trades about -0.04 of its potential returns per unit of risk. Zentalis Pharmaceuticals Llc is currently generating about -0.01 per unit of risk. If you would invest  8,051  in Citigroup on November 28, 2024 and sell it today you would lose (144.00) from holding Citigroup or give up 1.79% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Citigroup  vs.  Zentalis Pharmaceuticals Llc

Citigroup

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 10 (%) 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.

Zentalis Pharmaceuticals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Zentalis Pharmaceuticals Llc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in March 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Citigroup and Zentalis Pharmaceuticals

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

The idea behind Citigroup and Zentalis Pharmaceuticals Llc 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.