Correlation Between Citigroup and Baloise Swiss | C vs. BALSP.SW

Correlation Between Citigroup and Baloise Swiss

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Can any of the company-specific risk be diversified away by investing in both Citigroup and Baloise Swiss 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 Baloise Swiss into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Baloise Swiss Property, you can compare the effects of market volatilities on Citigroup and Baloise Swiss 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 Baloise Swiss. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Baloise Swiss.

Diversification Opportunities for Citigroup and Baloise Swiss

CitigroupBaloiseDiversified AwayCitigroupBaloiseDiversified Away100%
0.63
  Correlation Coefficient

Poor diversification

The 3 months correlation between Citigroup and Baloise is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Baloise Swiss Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baloise Swiss Property 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 Baloise Swiss. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baloise Swiss Property has no effect on the direction of Citigroup i.e., Citigroup and Baloise Swiss go up and down completely randomly.

Pair Corralation between Citigroup and Baloise Swiss

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.95 times more return on investment than Baloise Swiss. However, Citigroup is 1.95 times more volatile than Baloise Swiss Property. It trades about 0.07 of its potential returns per unit of risk. Baloise Swiss Property is currently generating about 0.01 per unit of risk. If you would invest  4,219  in Citigroup on September 23, 2024 and sell it today you would earn a total of  2,700  from holding Citigroup or generate 64.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy99.8%
ValuesDaily Returns

Citigroup  vs.  Baloise Swiss Property

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -5051015
JavaScript chart by amCharts 3.21.15C BALSP
       Timeline  
Citigroup 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
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 unsteady fundamental indicators, Citigroup may actually be approaching a critical reversion point that can send shares even higher in January 2025.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec62646668707274
Baloise Swiss Property 

Risk-Adjusted Performance

17 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Baloise Swiss Property are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of comparatively unsteady basic indicators, Baloise Swiss may actually be approaching a critical reversion point that can send shares even higher in January 2025.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec116118120122124126128

Citigroup and Baloise Swiss Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.77-4.32-2.87-1.420.02531.523.034.556.06 0.20.40.60.8
JavaScript chart by amCharts 3.21.15C BALSP
       Returns  

Pair Trading with Citigroup and Baloise Swiss

The main advantage of trading using opposite Citigroup and Baloise Swiss positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Baloise Swiss 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 Baloise Swiss will offset losses from the drop in Baloise Swiss' long position.
The idea behind Citigroup and Baloise Swiss Property 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.

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