Correlation Between Citigroup and ProFrac Holding

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

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

Diversification Opportunities for Citigroup and ProFrac Holding

0.23

Correlation Coefficient

Citigroup  ProFrac Holding

Modest diversification

The 3 months correlation between Citigroup and ProFrac is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and ProFrac Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProFrac Holding Corp 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 ProFrac Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProFrac Holding Corp has no effect on the direction of Citigroup i.e., Citigroup and ProFrac Holding go up and down completely randomly.

Pair Corralation between Citigroup and ProFrac Holding

Taking into account the 90-day investment horizon Citigroup is expected to generate 2.06 times less return on investment than ProFrac Holding. But when comparing it to its historical volatility, Citigroup is 3.7 times less risky than ProFrac Holding. It trades about 0.29 of its potential returns per unit of risk. ProFrac Holding Corp is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  398.00  in ProFrac Holding Corp on May 8, 2025 and sell it today you would earn a total of  229.00  from holding ProFrac Holding Corp or generate 57.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Citigroup  vs.  ProFrac Holding Corp

Citigroup

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

ProFrac Holding Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ProFrac Holding Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting fundamental indicators, ProFrac Holding exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and ProFrac Holding

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

The idea behind Citigroup and ProFrac Holding Corp 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.