Correlation Between Citigroup and Pure Biologics

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

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

Diversification Opportunities for Citigroup and Pure Biologics

-0.76

Correlation Coefficient

Citigroup  Pure Biologics

Pay attention - limited upside

The 3 months correlation between Citigroup and Pure is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Pure Biologics Splka in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pure Biologics Splka 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 Pure Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pure Biologics Splka has no effect on the direction of Citigroup i.e., Citigroup and Pure Biologics go up and down completely randomly.

Pair Corralation between Citigroup and Pure Biologics

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.43 times more return on investment than Pure Biologics. However, Citigroup is 2.33 times less risky than Pure Biologics. It trades about 0.18 of its potential returns per unit of risk. Pure Biologics Splka is currently generating about -0.13 per unit of risk. If you would invest  5,788  in Citigroup on September 16, 2024 and sell it today you would earn a total of  1,313  from holding Citigroup or generate 22.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

Citigroup  vs.  Pure Biologics Splka

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.

Pure Biologics Splka

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pure Biologics Splka has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Citigroup and Pure Biologics

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

The idea behind Citigroup and Pure Biologics Splka 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 Stocks Directory module to find actively traded stocks across global markets.