Correlation Between Citigroup and Caldwell Partners

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

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

Diversification Opportunities for Citigroup and Caldwell Partners

-0.27

Correlation Coefficient

Citigroup  Caldwell Partners

Very good diversification

The 3 months correlation between Citigroup and Caldwell is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Caldwell Partners Internationa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caldwell Partners 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 Caldwell Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caldwell Partners has no effect on the direction of Citigroup i.e., Citigroup and Caldwell Partners go up and down completely randomly.

Pair Corralation between Citigroup and Caldwell Partners

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.63 times more return on investment than Caldwell Partners. However, Citigroup is 1.58 times less risky than Caldwell Partners. It trades about 0.04 of its potential returns per unit of risk. Caldwell Partners International is currently generating about -0.05 per unit of risk. If you would invest  7,034  in Citigroup on March 1, 2025 and sell it today you would earn a total of  498.00  from holding Citigroup or generate 7.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.19%
Values	Daily Returns

Citigroup  vs.  Caldwell Partners Internationa

Citigroup

Risk-Adjusted Performance

Very Weak

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

Caldwell Partners

Risk-Adjusted Performance

Very Weak

Over the last 90 days Caldwell Partners International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's essential indicators remain very healthy which may send shares a bit higher in June 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Citigroup and Caldwell Partners

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

The idea behind Citigroup and Caldwell Partners International 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.