Correlation Between Citigroup and Navin Fluorine

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

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

Diversification Opportunities for Citigroup and Navin Fluorine

0.63

Correlation Coefficient

Citigroup  Navin Fluorine

Poor diversification

The 3 months correlation between Citigroup and Navin is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Navin Fluorine International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Navin Fluorine Inter 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 Navin Fluorine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Navin Fluorine Inter has no effect on the direction of Citigroup i.e., Citigroup and Navin Fluorine go up and down completely randomly.

Pair Corralation between Citigroup and Navin Fluorine

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.88 times less return on investment than Navin Fluorine. But when comparing it to its historical volatility, Citigroup is 2.02 times less risky than Navin Fluorine. It trades about 0.25 of its potential returns per unit of risk. Navin Fluorine International is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  330,990  in Navin Fluorine International on September 15, 2024 and sell it today you would earn a total of  24,770  from holding Navin Fluorine International or generate 7.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

Citigroup  vs.  Navin Fluorine International

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.

Navin Fluorine Inter

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Navin Fluorine International are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain basic indicators, Navin Fluorine may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Citigroup and Navin Fluorine

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

The idea behind Citigroup and Navin Fluorine International 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..