Correlation Between Citigroup and Federated Enhanced

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

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

Diversification Opportunities for Citigroup and Federated Enhanced

0.0

Correlation Coefficient

Citigroup  Federated Enhanced

Pay attention - limited upside

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

Pair Corralation between Citigroup and Federated Enhanced

If you would invest  6,127  in Citigroup on October 1, 2024 and sell it today you would earn a total of  973.00  from holding Citigroup or generate 15.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Citigroup  vs.  Federated Enhanced Treasury

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 weak fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Federated Enhanced

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Federated Enhanced Treasury has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Federated Enhanced is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Citigroup and Federated Enhanced

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

The idea behind Citigroup and Federated Enhanced Treasury 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.