Correlation Between Citigroup and Agriculture Printing

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

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

Diversification Opportunities for Citigroup and Agriculture Printing

-0.04

Correlation Coefficient

Citigroup  Agriculture Printing

Good diversification

The 3 months correlation between Citigroup and Agriculture is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Agriculture Printing and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agriculture Printing and 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 Agriculture Printing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agriculture Printing and has no effect on the direction of Citigroup i.e., Citigroup and Agriculture Printing go up and down completely randomly.

Pair Corralation between Citigroup and Agriculture Printing

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.96 times more return on investment than Agriculture Printing. However, Citigroup is 1.04 times less risky than Agriculture Printing. It trades about 0.09 of its potential returns per unit of risk. Agriculture Printing and is currently generating about 0.03 per unit of risk. If you would invest  5,896  in Citigroup on September 15, 2024 and sell it today you would earn a total of  1,205  from holding Citigroup or generate 20.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	91.27%
Values	Daily Returns

Citigroup  vs.  Agriculture Printing and

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.

Agriculture Printing and

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Agriculture Printing and are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Agriculture Printing is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Citigroup and Agriculture Printing

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

The idea behind Citigroup and Agriculture Printing and 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.