Correlation Between Citigroup and Realstone Swiss

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

Diversification Opportunities for Citigroup and Realstone Swiss

0.78
  Correlation Coefficient

Poor diversification

The 3 months correlation between Citigroup and Realstone is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Realstone Swiss Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Realstone 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 Realstone Swiss. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Realstone Swiss Property has no effect on the direction of Citigroup i.e., Citigroup and Realstone Swiss go up and down completely randomly.

Pair Corralation between Citigroup and Realstone Swiss

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.05 times less return on investment than Realstone Swiss. In addition to that, Citigroup is 1.96 times more volatile than Realstone Swiss Property. It trades about 0.07 of its total potential returns per unit of risk. Realstone Swiss Property is currently generating about 0.14 per unit of volatility. If you would invest  12,500  in Realstone Swiss Property on September 25, 2024 and sell it today you would earn a total of  2,200  from holding Realstone Swiss Property or generate 17.6% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy98.43%
ValuesDaily Returns

Citigroup  vs.  Realstone Swiss Property

 Performance 
       Timeline  
Citigroup 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 10 (%) 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.
Realstone Swiss Property 

Risk-Adjusted Performance

18 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Realstone Swiss Property are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly unsteady technical and fundamental indicators, Realstone Swiss showed solid returns over the last few months and may actually be approaching a breakup point.

Citigroup and Realstone Swiss Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Citigroup and Realstone Swiss

The main advantage of trading using opposite Citigroup and Realstone Swiss positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Realstone 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 Realstone Swiss will offset losses from the drop in Realstone Swiss' long position.
The idea behind Citigroup and Realstone 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.
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.

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