Correlation Between Citigroup and 159695

Can any of the company-specific risk be diversified away by investing in both Citigroup and 159695 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 159695 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Citigroup and 159695, you can compare the effects of market volatilities on Citigroup and 159695 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 159695. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and 159695.

Diversification Opportunities for Citigroup and 159695

0.74

Correlation Coefficient

Citigroup  159695

Poor diversification

The 3 months correlation between Citigroup and 159695 is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and 159695 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 159695 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 159695. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 159695 has no effect on the direction of Citigroup i.e., Citigroup and 159695 go up and down completely randomly.

Pair Corralation between Citigroup and 159695

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.98 times less return on investment than 159695. But when comparing it to its historical volatility, Citigroup is 1.56 times less risky than 159695. It trades about 0.13 of its potential returns per unit of risk. 159695 is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  90.00  in 159695 on September 1, 2024 and sell it today you would earn a total of  28.00  from holding 159695 or generate 31.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	92.06%
Values	Daily Returns

Citigroup  vs.  159695

Citigroup

Risk-Adjusted Performance

10 of 100

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.

159695

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in 159695 are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, 159695 sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and 159695

The main advantage of trading using opposite Citigroup and 159695 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, 159695 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 159695 will offset losses from the drop in 159695's long position.

The idea behind Citigroup and 159695 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.