Correlation Between CitiGroup and EUFX

Can any of the company-specific risk be diversified away by investing in both CitiGroup and EUFX 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 EUFX into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CitiGroup and EUFX, you can compare the effects of market volatilities on CitiGroup and EUFX 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 EUFX. Check out your portfolio center. Please also check ongoing floating volatility patterns of CitiGroup and EUFX.

Diversification Opportunities for CitiGroup and EUFX

0.0

Correlation Coefficient

CitiGroup  EUFX

Pay attention - limited upside

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

Pair Corralation between CitiGroup and EUFX

If you would invest  0.00  in EUFX on February 2, 2024 and sell it today you would earn a total of  0.00  from holding EUFX or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

CitiGroup  vs.  EUFX

CitiGroup

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CitiGroup has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental drivers, CitiGroup is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

EUFX

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EUFX has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, EUFX is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with CitiGroup and EUFX

The main advantage of trading using opposite CitiGroup and EUFX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CitiGroup position performs unexpectedly, EUFX 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 EUFX will offset losses from the drop in EUFX's long position.

The idea behind CitiGroup and EUFX 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.