Correlation Between Citigroup and NESNVX

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Can any of the company-specific risk be diversified away by investing in both Citigroup and NESNVX 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 NESNVX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and NESNVX 1875 14 SEP 31, you can compare the effects of market volatilities on Citigroup and NESNVX 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 NESNVX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and NESNVX.

Diversification Opportunities for Citigroup and NESNVX

0.18
  Correlation Coefficient

Average diversification

The 3 months correlation between Citigroup and NESNVX is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and NESNVX 1875 14 SEP 31 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NESNVX 1875 14 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 NESNVX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NESNVX 1875 14 has no effect on the direction of Citigroup i.e., Citigroup and NESNVX go up and down completely randomly.

Pair Corralation between Citigroup and NESNVX

Taking into account the 90-day investment horizon Citigroup is expected to generate 2.22 times more return on investment than NESNVX. However, Citigroup is 2.22 times more volatile than NESNVX 1875 14 SEP 31. It trades about 0.21 of its potential returns per unit of risk. NESNVX 1875 14 SEP 31 is currently generating about -0.03 per unit of risk. If you would invest  6,360  in Citigroup on August 29, 2024 and sell it today you would earn a total of  615.00  from holding Citigroup or generate 9.67% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy36.36%
ValuesDaily Returns

Citigroup  vs.  NESNVX 1875 14 SEP 31

 Performance 
       Timeline  
Citigroup 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 8 (%) 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.
NESNVX 1875 14 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days NESNVX 1875 14 SEP 31 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, NESNVX is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Citigroup and NESNVX Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Citigroup and NESNVX

The main advantage of trading using opposite Citigroup and NESNVX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, NESNVX 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 NESNVX will offset losses from the drop in NESNVX's long position.
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The idea behind Citigroup and NESNVX 1875 14 SEP 31 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

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