Correlation Between Citigroup and Datamatics Global

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

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

Diversification Opportunities for Citigroup and Datamatics Global

0.82

Correlation Coefficient

Citigroup  Datamatics Global

Very poor diversification

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

Pair Corralation between Citigroup and Datamatics Global

Taking into account the 90-day investment horizon Citigroup is expected to generate 2.12 times less return on investment than Datamatics Global. But when comparing it to its historical volatility, Citigroup is 1.81 times less risky than Datamatics Global. It trades about 0.24 of its potential returns per unit of risk. Datamatics Global Services is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  60,070  in Datamatics Global Services on May 20, 2025 and sell it today you would earn a total of  35,590  from holding Datamatics Global Services or generate 59.25% return on investment over 90 days.

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

Citigroup  vs.  Datamatics Global Services

Citigroup

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 18 (%) 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.

Datamatics Global

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Datamatics Global Services are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting forward indicators, Datamatics Global unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Datamatics Global

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

The idea behind Citigroup and Datamatics Global Services 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.