Correlation Between Citigroup and Apollo Power

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

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

Diversification Opportunities for Citigroup and Apollo Power

0.82

Correlation Coefficient

Citigroup  Apollo Power

Very poor diversification

The 3 months correlation between Citigroup and Apollo is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Apollo Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Power 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 Apollo Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Power has no effect on the direction of Citigroup i.e., Citigroup and Apollo Power go up and down completely randomly.

Pair Corralation between Citigroup and Apollo Power

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.41 times less return on investment than Apollo Power. But when comparing it to its historical volatility, Citigroup is 3.21 times less risky than Apollo Power. It trades about 0.28 of its potential returns per unit of risk. Apollo Power is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  28,430  in Apollo Power on May 9, 2025 and sell it today you would earn a total of  7,900  from holding Apollo Power or generate 27.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	81.97%
Values	Daily Returns

Citigroup  vs.  Apollo Power

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.

Apollo Power

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Apollo Power are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Apollo Power sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Apollo Power

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

The idea behind Citigroup and Apollo Power 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.