Correlation Between Juniata Valley and CITIGROUP

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

By analyzing existing cross correlation between Juniata Valley Financial and CITIGROUP INC, you can compare the effects of market volatilities on Juniata Valley and CITIGROUP 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 Juniata Valley with a short position of CITIGROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Juniata Valley and CITIGROUP.

Diversification Opportunities for Juniata Valley and CITIGROUP

-0.2

Correlation Coefficient

Juniata Valley  CITIGROUP

Good diversification

The 3 months correlation between Juniata and CITIGROUP is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Juniata Valley Financial and CITIGROUP INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIGROUP INC and Juniata Valley 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 Juniata Valley Financial are associated (or correlated) with CITIGROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIGROUP INC has no effect on the direction of Juniata Valley i.e., Juniata Valley and CITIGROUP go up and down completely randomly.

Pair Corralation between Juniata Valley and CITIGROUP

Given the investment horizon of 90 days Juniata Valley Financial is expected to generate 1.68 times more return on investment than CITIGROUP. However, Juniata Valley is 1.68 times more volatile than CITIGROUP INC. It trades about 0.1 of its potential returns per unit of risk. CITIGROUP INC is currently generating about -0.21 per unit of risk. If you would invest  1,245  in Juniata Valley Financial on September 18, 2024 and sell it today you would earn a total of  55.00  from holding Juniata Valley Financial or generate 4.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Juniata Valley Financial  vs.  CITIGROUP INC

Juniata Valley Financial

Risk-Adjusted Performance

7 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Juniata Valley Financial are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Juniata Valley reported solid returns over the last few months and may actually be approaching a breakup point.

CITIGROUP INC

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days CITIGROUP INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, CITIGROUP is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Juniata Valley and CITIGROUP

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

The idea behind Juniata Valley Financial and CITIGROUP INC 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.