Correlation Between Citigroup and Dewmar Intl

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

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

Diversification Opportunities for Citigroup and Dewmar Intl

0.0

Correlation Coefficient

Citigroup  Dewmar Intl

Pay attention - limited upside

The 3 months correlation between Citigroup and Dewmar is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Dewmar Intl Bmc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dewmar Intl Bmc 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 Dewmar Intl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dewmar Intl Bmc has no effect on the direction of Citigroup i.e., Citigroup and Dewmar Intl go up and down completely randomly.

Pair Corralation between Citigroup and Dewmar Intl

If you would invest  5,788  in Citigroup on September 14, 2024 and sell it today you would earn a total of  1,408  from holding Citigroup or generate 24.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Citigroup  vs.  Dewmar Intl Bmc

Citigroup

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 14 (%) 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.

Dewmar Intl Bmc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dewmar Intl Bmc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Dewmar Intl is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Citigroup and Dewmar Intl

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

The idea behind Citigroup and Dewmar Intl Bmc 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.