Correlation Between Citigroup and Invesco Pacific

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

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

Diversification Opportunities for Citigroup and Invesco Pacific

0.0

Correlation Coefficient

Citigroup  Invesco Pacific

Pay attention - limited upside

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

Pair Corralation between Citigroup and Invesco Pacific

If you would invest  6,860  in Citigroup on September 20, 2024 and sell it today you would earn a total of  42.00  from holding Citigroup or generate 0.61% return on investment over 90 days.

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

Citigroup  vs.  Invesco Pacific Equity

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

Invesco Pacific Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco Pacific Equity has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Invesco Pacific is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Citigroup and Invesco Pacific

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

The idea behind Citigroup and Invesco Pacific Equity 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.