Correlation Between CitiGroup and MRRL

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

Diversification Opportunities for CitiGroup and MRRL

0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between CitiGroup and MRRL

If you would invest (100.00) in MRRL on December 29, 2023 and sell it today you would earn a total of  100.00  from holding MRRL or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

CitiGroup  vs.  MRRL

 Performance 
       Timeline  
CitiGroup 

Risk-Adjusted Performance

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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.
MRRL 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days MRRL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, MRRL is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

CitiGroup and MRRL Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CitiGroup and MRRL

The main advantage of trading using opposite CitiGroup and MRRL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CitiGroup position performs unexpectedly, MRRL 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 MRRL will offset losses from the drop in MRRL's long position.
The idea behind CitiGroup and MRRL 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.

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