Correlation Between Citigroup and Grayscale Filecoin

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

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

Diversification Opportunities for Citigroup and Grayscale Filecoin

0.58

Correlation Coefficient

Citigroup  Grayscale Filecoin

Very weak diversification

The 3 months correlation between Citigroup and Grayscale is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Grayscale Filecoin Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grayscale Filecoin Trust 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 Grayscale Filecoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grayscale Filecoin Trust has no effect on the direction of Citigroup i.e., Citigroup and Grayscale Filecoin go up and down completely randomly.

Pair Corralation between Citigroup and Grayscale Filecoin

Taking into account the 90-day investment horizon Citigroup is expected to generate 12.03 times less return on investment than Grayscale Filecoin. But when comparing it to its historical volatility, Citigroup is 8.26 times less risky than Grayscale Filecoin. It trades about 0.07 of its potential returns per unit of risk. Grayscale Filecoin Trust is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  594.00  in Grayscale Filecoin Trust on September 19, 2024 and sell it today you would earn a total of  6,670  from holding Grayscale Filecoin Trust or generate 1122.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Citigroup  vs.  Grayscale Filecoin Trust

Citigroup

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 6 (%) 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.

Grayscale Filecoin Trust

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Grayscale Filecoin Trust are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting essential indicators, Grayscale Filecoin reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Grayscale Filecoin

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

The idea behind Citigroup and Grayscale Filecoin Trust 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.