Correlation Between CitiGroup and United States

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

Diversification Opportunities for CitiGroup and United States

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between CitiGroup and United is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CitiGroup and United States Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Oil 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 United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Oil has no effect on the direction of CitiGroup i.e., CitiGroup and United States go up and down completely randomly.

Pair Corralation between CitiGroup and United States

If you would invest  7,939  in United States Oil on December 29, 2023 and sell it today you would lose (85.00) from holding United States Oil or give up 1.07% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

CitiGroup  vs.  United States Oil

 Performance 
       Timeline  
CitiGroup 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days CitiGroup has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, CitiGroup is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.
United States Oil 

Risk-Adjusted Performance

13 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in United States Oil are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, United States displayed solid returns over the last few months and may actually be approaching a breakup point.

CitiGroup and United States Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CitiGroup and United States

The main advantage of trading using opposite CitiGroup and United States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CitiGroup position performs unexpectedly, United States 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 United States will offset losses from the drop in United States' long position.
The idea behind CitiGroup and United States Oil 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.

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