Correlation Between Citigroup and Link Real

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

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

Diversification Opportunities for Citigroup and Link Real

0.5

Correlation Coefficient

Citigroup  Link Real

Very weak diversification

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

Pair Corralation between Citigroup and Link Real

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.43 times more return on investment than Link Real. However, Citigroup is 2.32 times less risky than Link Real. It trades about 0.39 of its potential returns per unit of risk. Link Real Estate is currently generating about 0.12 per unit of risk. If you would invest  6,577  in Citigroup on April 23, 2025 and sell it today you would earn a total of  2,768  from holding Citigroup or generate 42.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Citigroup  vs.  Link Real Estate

Citigroup

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 31 (%) 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.

Link Real Estate

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Link Real Estate are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Link Real reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Link Real

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

The idea behind Citigroup and Link Real Estate 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.