Correlation Between Citigroup and Safety Shot

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

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

Diversification Opportunities for Citigroup and Safety Shot

-0.79

Correlation Coefficient

Citigroup  Safety Shot

Pay attention - limited upside

The 3 months correlation between Citigroup and Safety is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Safety Shot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safety Shot 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 Safety Shot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safety Shot has no effect on the direction of Citigroup i.e., Citigroup and Safety Shot go up and down completely randomly.

Pair Corralation between Citigroup and Safety Shot

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.41 times more return on investment than Safety Shot. However, Citigroup is 2.45 times less risky than Safety Shot. It trades about 0.09 of its potential returns per unit of risk. Safety Shot is currently generating about -0.18 per unit of risk. If you would invest  6,203  in Citigroup on September 21, 2024 and sell it today you would earn a total of  639.00  from holding Citigroup or generate 10.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Citigroup  vs.  Safety Shot

Citigroup

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Citigroup may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Safety Shot

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Safety Shot has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Citigroup and Safety Shot

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

The idea behind Citigroup and Safety Shot 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.