Correlation Between Centessa Pharmaceuticals and CITIGROUP

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Centessa Pharmaceuticals 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 Centessa Pharmaceuticals and CITIGROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centessa Pharmaceuticals PLC and CITIGROUP INC 6875, you can compare the effects of market volatilities on Centessa Pharmaceuticals 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 Centessa Pharmaceuticals with a short position of CITIGROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centessa Pharmaceuticals and CITIGROUP.

Diversification Opportunities for Centessa Pharmaceuticals and CITIGROUP

-0.35
  Correlation Coefficient

Very good diversification

The 3 months correlation between Centessa and CITIGROUP is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Centessa Pharmaceuticals PLC and CITIGROUP INC 6875 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIGROUP INC 6875 and Centessa Pharmaceuticals 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 Centessa Pharmaceuticals PLC 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 6875 has no effect on the direction of Centessa Pharmaceuticals i.e., Centessa Pharmaceuticals and CITIGROUP go up and down completely randomly.

Pair Corralation between Centessa Pharmaceuticals and CITIGROUP

Given the investment horizon of 90 days Centessa Pharmaceuticals PLC is expected to generate 2.36 times more return on investment than CITIGROUP. However, Centessa Pharmaceuticals is 2.36 times more volatile than CITIGROUP INC 6875. It trades about 0.11 of its potential returns per unit of risk. CITIGROUP INC 6875 is currently generating about 0.0 per unit of risk. If you would invest  688.00  in Centessa Pharmaceuticals PLC on September 12, 2024 and sell it today you would earn a total of  1,016  from holding Centessa Pharmaceuticals PLC or generate 147.67% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy73.39%
ValuesDaily Returns

Centessa Pharmaceuticals PLC  vs.  CITIGROUP INC 6875

 Performance 
       Timeline  
Centessa Pharmaceuticals 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Centessa Pharmaceuticals PLC are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Centessa Pharmaceuticals sustained solid returns over the last few months and may actually be approaching a breakup point.
CITIGROUP INC 6875 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days CITIGROUP INC 6875 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak 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 6875 investors.

Centessa Pharmaceuticals and CITIGROUP Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Centessa Pharmaceuticals and CITIGROUP

The main advantage of trading using opposite Centessa Pharmaceuticals and CITIGROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centessa Pharmaceuticals 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.
The idea behind Centessa Pharmaceuticals PLC and CITIGROUP INC 6875 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.

Other Complementary Tools

Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Odds Of Bankruptcy
Get analysis of equity chance of financial distress in the next 2 years
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets