Correlation Between Citigroup and Synmosa Biopharma

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

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

Diversification Opportunities for Citigroup and Synmosa Biopharma

-0.85

Correlation Coefficient

Citigroup  Synmosa Biopharma

Pay attention - limited upside

The 3 months correlation between Citigroup and Synmosa is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Synmosa Biopharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synmosa Biopharma 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 Synmosa Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synmosa Biopharma has no effect on the direction of Citigroup i.e., Citigroup and Synmosa Biopharma go up and down completely randomly.

Pair Corralation between Citigroup and Synmosa Biopharma

Taking into account the 90-day investment horizon Citigroup is expected to generate 2.63 times more return on investment than Synmosa Biopharma. However, Citigroup is 2.63 times more volatile than Synmosa Biopharma. It trades about 0.14 of its potential returns per unit of risk. Synmosa Biopharma is currently generating about -0.19 per unit of risk. If you would invest  6,042  in Citigroup on September 4, 2024 and sell it today you would earn a total of  1,097  from holding Citigroup or generate 18.16% return on investment over 90 days.

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

Citigroup  vs.  Synmosa Biopharma

Citigroup

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 11 (%) 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.

Synmosa Biopharma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Synmosa Biopharma has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Citigroup and Synmosa Biopharma

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

The idea behind Citigroup and Synmosa Biopharma 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..