Correlation Between Chemours and CITIGROUP

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Can any of the company-specific risk be diversified away by investing in both Chemours and CITIGROUP 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 Chemours and CITIGROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chemours Co and CITIGROUP INC 6675, you can compare the effects of market volatilities on Chemours and CITIGROUP 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 Chemours with a short position of CITIGROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chemours and CITIGROUP.

Diversification Opportunities for Chemours and CITIGROUP

-0.62
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Chemours and CITIGROUP is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Chemours Co and CITIGROUP INC 6675 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIGROUP INC 6675 and Chemours 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 Chemours Co are associated (or correlated) with CITIGROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIGROUP INC 6675 has no effect on the direction of Chemours i.e., Chemours and CITIGROUP go up and down completely randomly.

Pair Corralation between Chemours and CITIGROUP

Allowing for the 90-day total investment horizon Chemours is expected to generate 452.04 times less return on investment than CITIGROUP. But when comparing it to its historical volatility, Chemours Co is 14.4 times less risky than CITIGROUP. It trades about 0.0 of its potential returns per unit of risk. CITIGROUP INC 6675 is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  11,086  in CITIGROUP INC 6675 on September 12, 2024 and sell it today you would lose (166.00) from holding CITIGROUP INC 6675 or give up 1.5% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy89.29%
ValuesDaily Returns

Chemours Co  vs.  CITIGROUP INC 6675

 Performance 
       Timeline  
Chemours 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Chemours Co are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile fundamental indicators, Chemours exhibited solid returns over the last few months and may actually be approaching a breakup point.
CITIGROUP INC 6675 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days CITIGROUP INC 6675 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for CITIGROUP INC 6675 investors.

Chemours and CITIGROUP Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Chemours and CITIGROUP

The main advantage of trading using opposite Chemours and CITIGROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chemours position performs unexpectedly, CITIGROUP 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 CITIGROUP will offset losses from the drop in CITIGROUP's long position.
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The idea behind Chemours Co and CITIGROUP INC 6675 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 Commodity Directory module to find actively traded commodities issued by global exchanges.

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