Correlation Between Citigroup and Fearless Films

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

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

Diversification Opportunities for Citigroup and Fearless Films

-0.84

Correlation Coefficient

Citigroup  Fearless Films

Pay attention - limited upside

The 3 months correlation between Citigroup and Fearless is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Fearless Films in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fearless Films 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 Fearless Films. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fearless Films has no effect on the direction of Citigroup i.e., Citigroup and Fearless Films go up and down completely randomly.

Pair Corralation between Citigroup and Fearless Films

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.23 times more return on investment than Fearless Films. However, Citigroup is 4.4 times less risky than Fearless Films. It trades about 0.14 of its potential returns per unit of risk. Fearless Films is currently generating about -0.09 per unit of risk. If you would invest  3,639  in Citigroup on September 21, 2024 and sell it today you would earn a total of  3,280  from holding Citigroup or generate 90.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	82.07%
Values	Daily Returns

Citigroup  vs.  Fearless Films

Citigroup

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Citigroup may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Fearless Films

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fearless Films has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Fearless Films is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Citigroup and Fearless Films

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

The idea behind Citigroup and Fearless Films 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..