Correlation Between Citigroup and CM NV

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

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

Diversification Opportunities for Citigroup and CM NV

-0.79

Correlation Coefficient

Citigroup  CM NV

Pay attention - limited upside

The 3 months correlation between Citigroup and CMCOM is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and CM NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CM NV 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 CM NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CM NV has no effect on the direction of Citigroup i.e., Citigroup and CM NV go up and down completely randomly.

Pair Corralation between Citigroup and CM NV

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.47 times more return on investment than CM NV. However, Citigroup is 2.14 times less risky than CM NV. It trades about 0.23 of its potential returns per unit of risk. CM NV is currently generating about -0.34 per unit of risk. If you would invest  6,860  in Citigroup on September 20, 2024 and sell it today you would earn a total of  252.00  from holding Citigroup or generate 3.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	91.3%
Values	Daily Returns

Citigroup  vs.  CM NV

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.

CM NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CM NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Citigroup and CM NV

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

The idea behind Citigroup and CM NV 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.