Correlation Between Citigroup and Fomo Corp

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

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

Diversification Opportunities for Citigroup and Fomo Corp

-0.63

Correlation Coefficient

Citigroup  Fomo Corp

Excellent diversification

The 3 months correlation between Citigroup and Fomo is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Fomo Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fomo Corp 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 Fomo Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fomo Corp has no effect on the direction of Citigroup i.e., Citigroup and Fomo Corp go up and down completely randomly.

Pair Corralation between Citigroup and Fomo Corp

If you would invest  6,975  in Citigroup on September 27, 2024 and sell it today you would earn a total of  160.00  from holding Citigroup or generate 2.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	4.55%
Values	Daily Returns

Citigroup  vs.  Fomo Corp

Citigroup

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 10 (%) 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.

Fomo Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fomo Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Fomo Corp 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 Fomo Corp

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

The idea behind Citigroup and Fomo Corp 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.