Correlation Between Citigroup and Fortis

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

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

Diversification Opportunities for Citigroup and Fortis

0.62

Correlation Coefficient

Citigroup  Fortis

Poor diversification

The 3 months correlation between Citigroup and Fortis is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Fortis Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortis Inc 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 Fortis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortis Inc has no effect on the direction of Citigroup i.e., Citigroup and Fortis go up and down completely randomly.

Pair Corralation between Citigroup and Fortis

Taking into account the 90-day investment horizon Citigroup is expected to generate 2.17 times more return on investment than Fortis. However, Citigroup is 2.17 times more volatile than Fortis Inc. It trades about 0.13 of its potential returns per unit of risk. Fortis Inc is currently generating about 0.25 per unit of risk. If you would invest  8,703  in Citigroup on July 7, 2025 and sell it today you would earn a total of  1,071  from holding Citigroup or generate 12.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.46%
Values	Daily Returns

Citigroup  vs.  Fortis Inc

Citigroup

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Citigroup may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Fortis Inc

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fortis Inc are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Fortis may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Pair Trading with Citigroup and Fortis

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

The idea behind Citigroup and Fortis Inc 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.