Correlation Between Citigroup and FSD Pharma

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

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

Diversification Opportunities for Citigroup and FSD Pharma

-0.83

Correlation Coefficient

Citigroup  FSD Pharma

Pay attention - limited upside

The 3 months correlation between Citigroup and FSD is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and FSD Pharma Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FSD Pharma Class 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 FSD Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FSD Pharma Class has no effect on the direction of Citigroup i.e., Citigroup and FSD Pharma go up and down completely randomly.

Pair Corralation between Citigroup and FSD Pharma

If you would invest  6,900  in Citigroup on September 17, 2024 and sell it today you would earn a total of  249.00  from holding Citigroup or generate 3.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	4.76%
Values	Daily Returns

Citigroup  vs.  FSD Pharma Class

Citigroup

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

FSD Pharma Class

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FSD Pharma Class has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, FSD Pharma is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Citigroup and FSD Pharma

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

The idea behind Citigroup and FSD Pharma Class 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 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.