Correlation Between Citigroup and Icon Healthcare

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

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

Diversification Opportunities for Citigroup and Icon Healthcare

0.0

Correlation Coefficient

Citigroup  Icon Healthcare

Pay attention - limited upside

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

Pair Corralation between Citigroup and Icon Healthcare

If you would invest  6,975  in Citigroup on September 27, 2024 and sell it today you would earn a total of  125.00  from holding Citigroup or generate 1.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Citigroup  vs.  Icon Healthcare Fund

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.

Icon Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Icon Healthcare Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Icon Healthcare 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 Icon Healthcare

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

The idea behind Citigroup and Icon Healthcare Fund 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.