Correlation Between Citigroup and BayCurrent Consulting

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

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

Diversification Opportunities for Citigroup and BayCurrent Consulting

-0.85

Correlation Coefficient

Citigroup  BayCurrent Consulting

Pay attention - limited upside

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

Pair Corralation between Citigroup and BayCurrent Consulting

If you would invest  5,937  in Citigroup on September 18, 2024 and sell it today you would earn a total of  1,175  from holding Citigroup or generate 19.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	1.56%
Values	Daily Returns

Citigroup  vs.  BayCurrent Consulting

Citigroup

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 12 (%) 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.

BayCurrent Consulting

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BayCurrent Consulting has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, BayCurrent Consulting is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Citigroup and BayCurrent Consulting

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

The idea behind Citigroup and BayCurrent Consulting 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.