Correlation Between Citigroup and New Opportunities

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

Diversification Opportunities for Citigroup and New Opportunities

0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between Citigroup and New Opportunities

If you would invest  5,571  in Citigroup on December 29, 2023 and sell it today you would earn a total of  753.00  from holding Citigroup or generate 13.52% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Citigroup  vs.  NEW OPPORTUNITIES FUND

 Performance 
       Timeline  
Citigroup 

Risk-Adjusted Performance

20 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.
New Opportunities Fund 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days New Opportunities Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, New Opportunities is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Citigroup and New Opportunities Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Citigroup and New Opportunities

The main advantage of trading using opposite Citigroup and New Opportunities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, New Opportunities 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 New Opportunities will offset losses from the drop in New Opportunities' long position.
The idea behind Citigroup and New Opportunities Fund 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.

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