Correlation Between Citigroup and Bold Ventures

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

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

Diversification Opportunities for Citigroup and Bold Ventures

-0.26

Correlation Coefficient

Citigroup  Bold Ventures

Very good diversification

The 3 months correlation between Citigroup and Bold is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Bold Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bold Ventures 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 Bold Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bold Ventures has no effect on the direction of Citigroup i.e., Citigroup and Bold Ventures go up and down completely randomly.

Pair Corralation between Citigroup and Bold Ventures

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.22 times more return on investment than Bold Ventures. However, Citigroup is 4.61 times less risky than Bold Ventures. It trades about 0.14 of its potential returns per unit of risk. Bold Ventures is currently generating about -0.01 per unit of risk. If you would invest  6,133  in Citigroup on September 27, 2024 and sell it today you would earn a total of  1,002  from holding Citigroup or generate 16.34% return on investment over 90 days.

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

Citigroup  vs.  Bold Ventures

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.

Bold Ventures

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bold Ventures 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 Bold Ventures

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

The idea behind Citigroup and Bold Ventures 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.