Correlation Between Citigroup and BlockchainK2 Corp

Can any of the company-specific risk be diversified away by investing in both Citigroup and BlockchainK2 Corp 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 BlockchainK2 Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Citigroup and BlockchainK2 Corp, you can compare the effects of market volatilities on Citigroup and BlockchainK2 Corp 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 BlockchainK2 Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and BlockchainK2 Corp.

Diversification Opportunities for Citigroup and BlockchainK2 Corp

-0.12

Correlation Coefficient

Citigroup  BlockchainK2 Corp

Good diversification

The 3 months correlation between Citigroup and BlockchainK2 is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and BlockchainK2 Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlockchainK2 Corp 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 BlockchainK2 Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlockchainK2 Corp has no effect on the direction of Citigroup i.e., Citigroup and BlockchainK2 Corp go up and down completely randomly.

Pair Corralation between Citigroup and BlockchainK2 Corp

Taking into account the 90-day investment horizon Citigroup is expected to generate 3.14 times less return on investment than BlockchainK2 Corp. But when comparing it to its historical volatility, Citigroup is 7.14 times less risky than BlockchainK2 Corp. It trades about 0.12 of its potential returns per unit of risk. BlockchainK2 Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  8.00  in BlockchainK2 Corp on September 14, 2024 and sell it today you would earn a total of  0.80  from holding BlockchainK2 Corp or generate 10.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.63%
Values	Daily Returns

Citigroup  vs.  BlockchainK2 Corp

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.

BlockchainK2 Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BlockchainK2 Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, BlockchainK2 Corp is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Citigroup and BlockchainK2 Corp

The main advantage of trading using opposite Citigroup and BlockchainK2 Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, BlockchainK2 Corp 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 BlockchainK2 Corp will offset losses from the drop in BlockchainK2 Corp's long position.

The idea behind Citigroup and BlockchainK2 Corp 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.