Correlation Between Citigroup and Associates First

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

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

Diversification Opportunities for Citigroup and Associates First

0.13

Correlation Coefficient

Citigroup  Associates First

Average diversification

The 3 months correlation between Citigroup and Associates is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Associates First Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Associates First Capital 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 Associates First. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Associates First Capital has no effect on the direction of Citigroup i.e., Citigroup and Associates First go up and down completely randomly.

Pair Corralation between Citigroup and Associates First

If you would invest  6,209  in Citigroup on August 30, 2024 and sell it today you would earn a total of  807.00  from holding Citigroup or generate 13.0% return on investment over 90 days.

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

Citigroup  vs.  Associates First Capital

Citigroup

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 8 (%) 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.

Associates First Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Associates First Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Associates First is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Citigroup and Associates First

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

The idea behind Citigroup and Associates First Capital 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.