Correlation Between Citigroup and Phreesia

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

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

Diversification Opportunities for Citigroup and Phreesia

0.43

Correlation Coefficient

Citigroup  Phreesia

Very weak diversification

The 3 months correlation between Citigroup and Phreesia is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Phreesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phreesia 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 Phreesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phreesia has no effect on the direction of Citigroup i.e., Citigroup and Phreesia go up and down completely randomly.

Pair Corralation between Citigroup and Phreesia

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.29 times less return on investment than Phreesia. But when comparing it to its historical volatility, Citigroup is 1.95 times less risky than Phreesia. It trades about 0.14 of its potential returns per unit of risk. Phreesia is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  2,020  in Phreesia on September 27, 2024 and sell it today you would earn a total of  360.00  from holding Phreesia or generate 17.82% return on investment over 90 days.

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

Citigroup  vs.  Phreesia

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

Phreesia

Risk-Adjusted Performance

7 of 100

OK

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

Pair Trading with Citigroup and Phreesia

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

The idea behind Citigroup and Phreesia 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.