Correlation Between Citigroup and Internetarray

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

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

Diversification Opportunities for Citigroup and Internetarray

0.0

Correlation Coefficient

Citigroup  Internetarray

Pay attention - limited upside

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

Pair Corralation between Citigroup and Internetarray

If you would invest  5,593  in Citigroup on January 24, 2024 and sell it today you would earn a total of  502.00  from holding Citigroup or generate 8.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Citigroup  vs.  Internetarray

Citigroup

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Internetarray

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Citigroup and Internetarray

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

The idea behind Citigroup and Internetarray 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.