Correlation Between Citigroup and Country Group

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

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

Diversification Opportunities for Citigroup and Country Group

-0.2

Correlation Coefficient

Citigroup  Country Group

Good diversification

The 3 months correlation between Citigroup and Country is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Country Group Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Country Group Development 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 Country Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Country Group Development has no effect on the direction of Citigroup i.e., Citigroup and Country Group go up and down completely randomly.

Pair Corralation between Citigroup and Country Group

Taking into account the 90-day investment horizon Citigroup is expected to generate 44.32 times less return on investment than Country Group. But when comparing it to its historical volatility, Citigroup is 48.18 times less risky than Country Group. It trades about 0.09 of its potential returns per unit of risk. Country Group Development is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  33.00  in Country Group Development on September 15, 2024 and sell it today you would earn a total of  0.00  from holding Country Group Development or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.62%
Values	Daily Returns

Citigroup  vs.  Country Group Development

Citigroup

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 13 (%) 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.

Country Group Development

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Country Group Development has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Country Group is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Citigroup and Country Group

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

The idea behind Citigroup and Country Group Development 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.