Correlation Between Citigroup and DC HEALTHCARE

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

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

Diversification Opportunities for Citigroup and DC HEALTHCARE

-0.49

Correlation Coefficient

Citigroup  DC HEALTHCARE

Very good diversification

The 3 months correlation between Citigroup and 0283 is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and DC HEALTHCARE HOLDINGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DC HEALTHCARE HOLDINGS 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 DC HEALTHCARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DC HEALTHCARE HOLDINGS has no effect on the direction of Citigroup i.e., Citigroup and DC HEALTHCARE go up and down completely randomly.

Pair Corralation between Citigroup and DC HEALTHCARE

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.52 times more return on investment than DC HEALTHCARE. However, Citigroup is 1.92 times less risky than DC HEALTHCARE. It trades about 0.18 of its potential returns per unit of risk. DC HEALTHCARE HOLDINGS is currently generating about 0.02 per unit of risk. If you would invest  5,788  in Citigroup on September 15, 2024 and sell it today you would earn a total of  1,313  from holding Citigroup or generate 22.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Citigroup  vs.  DC HEALTHCARE HOLDINGS

Citigroup

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 13 (%) 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.

DC HEALTHCARE HOLDINGS

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in DC HEALTHCARE HOLDINGS are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, DC HEALTHCARE is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Citigroup and DC HEALTHCARE

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

The idea behind Citigroup and DC HEALTHCARE HOLDINGS 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.