Correlation Between Citigroup and Minerva Surgical

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

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

Diversification Opportunities for Citigroup and Minerva Surgical

0.33

Correlation Coefficient

Citigroup  Minerva Surgical

Weak diversification

The 3 months correlation between Citigroup and Minerva is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Minerva Surgical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minerva Surgical 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 Minerva Surgical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minerva Surgical has no effect on the direction of Citigroup i.e., Citigroup and Minerva Surgical go up and down completely randomly.

Pair Corralation between Citigroup and Minerva Surgical

Taking into account the 90-day investment horizon Citigroup is expected to generate 8.9 times less return on investment than Minerva Surgical. But when comparing it to its historical volatility, Citigroup is 9.56 times less risky than Minerva Surgical. It trades about 0.08 of its potential returns per unit of risk. Minerva Surgical is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  22.00  in Minerva Surgical on August 31, 2024 and sell it today you would earn a total of  4.00  from holding Minerva Surgical or generate 18.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	13.45%
Values	Daily Returns

Citigroup  vs.  Minerva Surgical

Citigroup

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 9 (%) 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.

Minerva Surgical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Minerva Surgical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Minerva Surgical is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Citigroup and Minerva Surgical

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

The idea behind Citigroup and Minerva Surgical 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..