Correlation Between Citigroup and Eventide Exponential

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

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

Diversification Opportunities for Citigroup and Eventide Exponential

0.96

Correlation Coefficient

Citigroup  Eventide Exponential

Almost no diversification

The 3 months correlation between Citigroup and Eventide is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Eventide Exponential Technolog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eventide Exponential 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 Eventide Exponential. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eventide Exponential has no effect on the direction of Citigroup i.e., Citigroup and Eventide Exponential go up and down completely randomly.

Pair Corralation between Citigroup and Eventide Exponential

Taking into account the 90-day investment horizon Citigroup is expected to under-perform the Eventide Exponential. But the stock apears to be less risky and, when comparing its historical volatility, Citigroup is 1.24 times less risky than Eventide Exponential. The stock trades about -0.05 of its potential returns per unit of risk. The Eventide Exponential Technologies is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  1,323  in Eventide Exponential Technologies on September 24, 2024 and sell it today you would lose (14.00) from holding Eventide Exponential Technologies or give up 1.06% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	95.24%
Values	Daily Returns

Citigroup  vs.  Eventide Exponential Technolog

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.

Eventide Exponential

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eventide Exponential Technologies are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Eventide Exponential may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Citigroup and Eventide Exponential

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

The idea behind Citigroup and Eventide Exponential Technologies 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..