Correlation Between Citigroup and Casino Guichard

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

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

Diversification Opportunities for Citigroup and Casino Guichard

-0.2

Correlation Coefficient

Citigroup  Casino Guichard

Good diversification

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

Pair Corralation between Citigroup and Casino Guichard

Taking into account the 90-day investment horizon Citigroup is expected to generate 396.86 times less return on investment than Casino Guichard. But when comparing it to its historical volatility, Citigroup is 158.28 times less risky than Casino Guichard. It trades about 0.1 of its potential returns per unit of risk. Casino Guichard Perrachon is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  12.00  in Casino Guichard Perrachon on September 20, 2024 and sell it today you would lose (2.00) from holding Casino Guichard Perrachon or give up 16.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	40.32%
Values	Daily Returns

Citigroup  vs.  Casino Guichard Perrachon

Citigroup

Risk-Adjusted Performance

10 of 100

Modest

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 unfluctuating fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Casino Guichard Perrachon

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Casino Guichard Perrachon has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Casino Guichard is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Citigroup and Casino Guichard

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

The idea behind Citigroup and Casino Guichard Perrachon 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.