Correlation Between Citigroup and Invesco International

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

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

Diversification Opportunities for Citigroup and Invesco International

0.23

Correlation Coefficient

Citigroup  Invesco International

Modest diversification

The 3 months correlation between Citigroup and Invesco is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Invesco International E in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco International 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 Invesco International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco International has no effect on the direction of Citigroup i.e., Citigroup and Invesco International go up and down completely randomly.

Pair Corralation between Citigroup and Invesco International

If you would invest  1,123  in Invesco International E on September 23, 2024 and sell it today you would earn a total of  0.00  from holding Invesco International E or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	4.76%
Values	Daily Returns

Citigroup  vs.  Invesco International E

Citigroup

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Citigroup may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Invesco International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco International E has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Invesco International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Citigroup and Invesco International

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

The idea behind Citigroup and Invesco International E 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.