Correlation Between Citigroup and XTL Biopharmaceutica

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

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

Diversification Opportunities for Citigroup and XTL Biopharmaceutica

-0.55

Correlation Coefficient

Citigroup  XTL Biopharmaceutica

Excellent diversification

The 3 months correlation between Citigroup and XTL is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and XTL Biopharmaceuticals Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XTL Biopharmaceuticals 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 XTL Biopharmaceutica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XTL Biopharmaceuticals has no effect on the direction of Citigroup i.e., Citigroup and XTL Biopharmaceutica go up and down completely randomly.

Pair Corralation between Citigroup and XTL Biopharmaceutica

Taking into account the 90-day investment horizon Citigroup is expected to generate 3.32 times less return on investment than XTL Biopharmaceutica. But when comparing it to its historical volatility, Citigroup is 6.08 times less risky than XTL Biopharmaceutica. It trades about 0.11 of its potential returns per unit of risk. XTL Biopharmaceuticals Ltd is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  113.00  in XTL Biopharmaceuticals Ltd on September 28, 2024 and sell it today you would earn a total of  97.00  from holding XTL Biopharmaceuticals Ltd or generate 85.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.88%
Values	Daily Returns

Citigroup  vs.  XTL Biopharmaceuticals Ltd

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 uncertain fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

XTL Biopharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days XTL Biopharmaceuticals Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong essential indicators, XTL Biopharmaceutica is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Citigroup and XTL Biopharmaceutica

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

The idea behind Citigroup and XTL Biopharmaceuticals Ltd 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.

Check out your portfolio center.

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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..