Correlation Between Citigroup and Gamco Investors

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

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

Diversification Opportunities for Citigroup and Gamco Investors

-0.25

Correlation Coefficient

Citigroup  Gamco Investors

Very good diversification

The 3 months correlation between Citigroup and Gamco is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Gamco Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamco Investors 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 Gamco Investors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamco Investors has no effect on the direction of Citigroup i.e., Citigroup and Gamco Investors go up and down completely randomly.

Pair Corralation between Citigroup and Gamco Investors

If you would invest  6,205  in Citigroup on September 30, 2024 and sell it today you would earn a total of  895.00  from holding Citigroup or generate 14.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Citigroup  vs.  Gamco Investors

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.

Gamco Investors

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Citigroup and Gamco Investors

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

The idea behind Citigroup and Gamco Investors 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.