Correlation Between Citigroup and 015271BA6

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Can any of the company-specific risk be diversified away by investing in both Citigroup and 015271BA6 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 015271BA6 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and ARE 475 15 APR 35, you can compare the effects of market volatilities on Citigroup and 015271BA6 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 015271BA6. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and 015271BA6.

Diversification Opportunities for Citigroup and 015271BA6

-0.75
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Citigroup and 015271BA6 is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and ARE 475 15 APR 35 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARE 475 15 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 015271BA6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARE 475 15 has no effect on the direction of Citigroup i.e., Citigroup and 015271BA6 go up and down completely randomly.

Pair Corralation between Citigroup and 015271BA6

Taking into account the 90-day investment horizon Citigroup is expected to generate 2.55 times more return on investment than 015271BA6. However, Citigroup is 2.55 times more volatile than ARE 475 15 APR 35. It trades about 0.25 of its potential returns per unit of risk. ARE 475 15 APR 35 is currently generating about -0.16 per unit of risk. If you would invest  6,360  in Citigroup on August 28, 2024 and sell it today you would earn a total of  715.00  from holding Citigroup or generate 11.24% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy95.45%
ValuesDaily Returns

Citigroup  vs.  ARE 475 15 APR 35

 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.
ARE 475 15 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days ARE 475 15 APR 35 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 015271BA6 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Citigroup and 015271BA6 Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Citigroup and 015271BA6

The main advantage of trading using opposite Citigroup and 015271BA6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, 015271BA6 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 015271BA6 will offset losses from the drop in 015271BA6's long position.
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The idea behind Citigroup and ARE 475 15 APR 35 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.

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