Correlation Between Citigroup and BANORT

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

By analyzing existing cross correlation between Citigroup and BANORT 8 38, you can compare the effects of market volatilities on Citigroup and BANORT 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 BANORT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and BANORT.

Diversification Opportunities for Citigroup and BANORT

0.74

Correlation Coefficient

Citigroup  BANORT

Poor diversification

The 3 months correlation between Citigroup and BANORT is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and BANORT 8 38 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANORT 8 38 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 BANORT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANORT 8 38 has no effect on the direction of Citigroup i.e., Citigroup and BANORT go up and down completely randomly.

Pair Corralation between Citigroup and BANORT

Taking into account the 90-day investment horizon Citigroup is expected to under-perform the BANORT. In addition to that, Citigroup is 2.48 times more volatile than BANORT 8 38. It trades about -0.09 of its total potential returns per unit of risk. BANORT 8 38 is currently generating about -0.19 per unit of volatility. If you would invest  10,280  in BANORT 8 38 on January 31, 2024 and sell it today you would lose (235.00) from holding BANORT 8 38 or give up 2.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	81.82%
Values	Daily Returns

Citigroup  vs.  BANORT 8 38

Citigroup

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Citigroup may actually be approaching a critical reversion point that can send shares even higher in May 2024.

BANORT 8 38

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BANORT 8 38 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for BANORT 8 38 investors.

Pair Trading with Citigroup and BANORT

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

The idea behind Citigroup and BANORT 8 38 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.