Correlation Between Citigroup and SKAGEN M

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

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

Diversification Opportunities for Citigroup and SKAGEN M

0.0

Correlation Coefficient

Citigroup  SKAGEN M

Pay attention - limited upside

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

Pair Corralation between Citigroup and SKAGEN M

If you would invest  6,095  in Citigroup on January 24, 2024 and sell it today you would earn a total of  0.00  from holding Citigroup or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	5.0%
Values	Daily Returns

Citigroup  vs.  SKAGEN m

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.

SKAGEN m

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SKAGEN m has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, SKAGEN M is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Citigroup and SKAGEN M

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

The idea behind Citigroup and SKAGEN m 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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.