Correlation Between Realty Income and Citigroup

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

Diversification Opportunities for Realty Income and Citigroup

-0.65
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Realty and Citigroup is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Realty Income Corp and Citigroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup and Realty Income 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 Realty Income Corp 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 has no effect on the direction of Realty Income i.e., Realty Income and Citigroup go up and down completely randomly.

Pair Corralation between Realty Income and Citigroup

Taking into account the 90-day investment horizon Realty Income is expected to generate 3.62 times less return on investment than Citigroup. But when comparing it to its historical volatility, Realty Income Corp is 1.19 times less risky than Citigroup. It trades about 0.18 of its potential returns per unit of risk. Citigroup is currently generating about 0.56 of returns per unit of risk over similar time horizon. If you would invest  5,571  in Citigroup on December 29, 2023 and sell it today you would earn a total of  704.00  from holding Citigroup or generate 12.64% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Realty Income Corp  vs.  Citigroup

 Performance 
       Timeline  
Realty me Corp 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Realty Income Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Realty Income is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.
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.

Realty Income and Citigroup Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Realty Income and Citigroup

The main advantage of trading using opposite Realty Income and Citigroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Realty Income 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 Realty Income Corp and Citigroup 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.

Other Complementary Tools

ETFs
Find actively traded Exchange Traded Funds (ETF) from around the world
Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Crypto Correlations
Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Global Correlations
Find global opportunities by holding instruments from different markets