Correlation Between Citigroup and Blockchain Coinvestors

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

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

Diversification Opportunities for Citigroup and Blockchain Coinvestors

-0.84

Correlation Coefficient

Citigroup  Blockchain Coinvestors

Pay attention - limited upside

The 3 months correlation between Citigroup and Blockchain is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Blockchain Coinvestors Acquisi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blockchain Coinvestors 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 Blockchain Coinvestors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blockchain Coinvestors has no effect on the direction of Citigroup i.e., Citigroup and Blockchain Coinvestors go up and down completely randomly.

Pair Corralation between Citigroup and Blockchain Coinvestors

Taking into account the 90-day investment horizon Citigroup is expected to generate 49.17 times less return on investment than Blockchain Coinvestors. But when comparing it to its historical volatility, Citigroup is 35.74 times less risky than Blockchain Coinvestors. It trades about 0.1 of its potential returns per unit of risk. Blockchain Coinvestors Acquisition is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  3.40  in Blockchain Coinvestors Acquisition on September 22, 2024 and sell it today you would lose (3.31) from holding Blockchain Coinvestors Acquisition or give up 97.35% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	54.69%
Values	Daily Returns

Citigroup  vs.  Blockchain Coinvestors Acquisi

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 unsteady fundamental indicators, Citigroup may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Blockchain Coinvestors

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Blockchain Coinvestors Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly weak basic indicators, Blockchain Coinvestors showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Blockchain Coinvestors

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

The idea behind Citigroup and Blockchain Coinvestors Acquisition 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.