Correlation Between Citigroup and 12673PAJ4

Can any of the company-specific risk be diversified away by investing in both Citigroup and 12673PAJ4 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 12673PAJ4 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Citigroup and CA INC 47, you can compare the effects of market volatilities on Citigroup and 12673PAJ4 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 12673PAJ4. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and 12673PAJ4.

Diversification Opportunities for Citigroup and 12673PAJ4

-0.52

Correlation Coefficient

Citigroup  12673PAJ4

Excellent diversification

The 3 months correlation between Citigroup and 12673PAJ4 is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and CA INC 47 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CA INC 47 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 12673PAJ4. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CA INC 47 has no effect on the direction of Citigroup i.e., Citigroup and 12673PAJ4 go up and down completely randomly.

Pair Corralation between Citigroup and 12673PAJ4

Taking into account the 90-day investment horizon Citigroup is expected to generate 2.27 times more return on investment than 12673PAJ4. However, Citigroup is 2.27 times more volatile than CA INC 47. It trades about 0.16 of its potential returns per unit of risk. CA INC 47 is currently generating about 0.01 per unit of risk. If you would invest  5,937  in Citigroup on September 18, 2024 and sell it today you would earn a total of  1,212  from holding Citigroup or generate 20.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	87.3%
Values	Daily Returns

Citigroup  vs.  CA INC 47

Citigroup

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 12 (%) 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.

CA INC 47

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CA INC 47 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 12673PAJ4 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 12673PAJ4

The main advantage of trading using opposite Citigroup and 12673PAJ4 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, 12673PAJ4 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 12673PAJ4 will offset losses from the drop in 12673PAJ4's long position.

The idea behind Citigroup and CA INC 47 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.