Correlation Between Citigroup and STANLN

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Can any of the company-specific risk be diversified away by investing in both Citigroup and STANLN 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 STANLN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and STANLN 32 17 APR 25, you can compare the effects of market volatilities on Citigroup and STANLN 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 STANLN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and STANLN.

Diversification Opportunities for Citigroup and STANLN

0.92
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Citigroup and STANLN is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and STANLN 32 17 APR 25 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STANLN 32 17 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 STANLN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STANLN 32 17 has no effect on the direction of Citigroup i.e., Citigroup and STANLN go up and down completely randomly.

Pair Corralation between Citigroup and STANLN

Taking into account the 90-day investment horizon Citigroup is expected to generate 15.12 times more return on investment than STANLN. However, Citigroup is 15.12 times more volatile than STANLN 32 17 APR 25. It trades about 0.27 of its potential returns per unit of risk. STANLN 32 17 APR 25 is currently generating about 0.72 per unit of risk. If you would invest  6,889  in Citigroup on September 14, 2024 and sell it today you would earn a total of  307.00  from holding Citigroup or generate 4.46% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy19.05%
ValuesDaily Returns

Citigroup  vs.  STANLN 32 17 APR 25

 Performance 
       Timeline  
Citigroup 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 14 (%) 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.
STANLN 32 17 

Risk-Adjusted Performance

20 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in STANLN 32 17 APR 25 are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, STANLN is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Citigroup and STANLN Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Citigroup and STANLN

The main advantage of trading using opposite Citigroup and STANLN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, STANLN 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 STANLN will offset losses from the drop in STANLN's long position.
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The idea behind Citigroup and STANLN 32 17 APR 25 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.

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