Correlation Between Citigroup and ASM International

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

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

Diversification Opportunities for Citigroup and ASM International

0.5

Correlation Coefficient

Citigroup  ASM International

Very weak diversification

The 3 months correlation between Citigroup and ASM is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and ASM International NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASM International 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 ASM International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASM International has no effect on the direction of Citigroup i.e., Citigroup and ASM International go up and down completely randomly.

Pair Corralation between Citigroup and ASM International

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.58 times more return on investment than ASM International. However, Citigroup is 1.74 times less risky than ASM International. It trades about 0.37 of its potential returns per unit of risk. ASM International NV is currently generating about 0.04 per unit of risk. If you would invest  6,833  in Citigroup on April 29, 2025 and sell it today you would earn a total of  2,722  from holding Citigroup or generate 39.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.88%
Values	Daily Returns

Citigroup  vs.  ASM International NV

Citigroup

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

ASM International

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ASM International NV are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain primary indicators, ASM International may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Citigroup and ASM International

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

The idea behind Citigroup and ASM International NV 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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.