Correlation Between Citigroup and Cybertech Systems

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

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

Diversification Opportunities for Citigroup and Cybertech Systems

-0.28

Correlation Coefficient

Citigroup  Cybertech Systems

Very good diversification

The 3 months correlation between Citigroup and Cybertech is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Cybertech Systems And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cybertech Systems And 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 Cybertech Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cybertech Systems And has no effect on the direction of Citigroup i.e., Citigroup and Cybertech Systems go up and down completely randomly.

Pair Corralation between Citigroup and Cybertech Systems

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.75 times more return on investment than Cybertech Systems. However, Citigroup is 1.33 times less risky than Cybertech Systems. It trades about 0.12 of its potential returns per unit of risk. Cybertech Systems And is currently generating about -0.03 per unit of risk. If you would invest  6,205  in Citigroup on September 30, 2024 and sell it today you would earn a total of  895.00  from holding Citigroup or generate 14.42% return on investment over 90 days.

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

Citigroup  vs.  Cybertech Systems And

Citigroup

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 9 (%) 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.

Cybertech Systems And

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cybertech Systems And has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Cybertech Systems is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Citigroup and Cybertech Systems

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

The idea behind Citigroup and Cybertech Systems And 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.