Correlation Between Citigroup and 49327M3G7

Can any of the company-specific risk be diversified away by investing in both Citigroup and 49327M3G7 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 49327M3G7 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Citigroup and KEY 47 26 JAN 26, you can compare the effects of market volatilities on Citigroup and 49327M3G7 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 49327M3G7. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and 49327M3G7.

Diversification Opportunities for Citigroup and 49327M3G7

-0.15

Correlation Coefficient

Citigroup  49327M3G7

Good diversification

The 3 months correlation between Citigroup and 49327M3G7 is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and KEY 47 26 JAN 26 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KEY 47 26 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 49327M3G7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KEY 47 26 has no effect on the direction of Citigroup i.e., Citigroup and 49327M3G7 go up and down completely randomly.

Pair Corralation between Citigroup and 49327M3G7

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.93 times more return on investment than 49327M3G7. However, Citigroup is 1.93 times more volatile than KEY 47 26 JAN 26. It trades about 0.06 of its potential returns per unit of risk. KEY 47 26 JAN 26 is currently generating about -0.21 per unit of risk. If you would invest  6,828  in Citigroup on September 21, 2024 and sell it today you would earn a total of  91.00  from holding Citigroup or generate 1.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	63.64%
Values	Daily Returns

Citigroup  vs.  KEY 47 26 JAN 26

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.

KEY 47 26

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KEY 47 26 JAN 26 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 49327M3G7 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Citigroup and 49327M3G7

The main advantage of trading using opposite Citigroup and 49327M3G7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, 49327M3G7 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 49327M3G7 will offset losses from the drop in 49327M3G7's long position.

The idea behind Citigroup and KEY 47 26 JAN 26 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.