Correlation Between Citigroup and SEAZEN GROUP

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

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

Diversification Opportunities for Citigroup and SEAZEN GROUP

-0.34

Correlation Coefficient

Citigroup  SEAZEN GROUP

Very good diversification

The 3 months correlation between Citigroup and SEAZEN is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and SEAZEN GROUP LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEAZEN GROUP LTD 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 SEAZEN GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEAZEN GROUP LTD has no effect on the direction of Citigroup i.e., Citigroup and SEAZEN GROUP go up and down completely randomly.

Pair Corralation between Citigroup and SEAZEN GROUP

Taking into account the 90-day investment horizon Citigroup is expected to generate 2.63 times less return on investment than SEAZEN GROUP. But when comparing it to its historical volatility, Citigroup is 3.34 times less risky than SEAZEN GROUP. It trades about 0.1 of its potential returns per unit of risk. SEAZEN GROUP LTD is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  18.00  in SEAZEN GROUP LTD on September 23, 2024 and sell it today you would earn a total of  4.00  from holding SEAZEN GROUP LTD or generate 22.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.48%
Values	Daily Returns

Citigroup  vs.  SEAZEN GROUP LTD

Citigroup

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental indicators, Citigroup may actually be approaching a critical reversion point that can send shares even higher in January 2025.

SEAZEN GROUP LTD

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SEAZEN GROUP LTD are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile essential indicators, SEAZEN GROUP reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and SEAZEN GROUP

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

The idea behind Citigroup and SEAZEN GROUP LTD 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.