Correlation Between Citigroup and Matthews International

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

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

Diversification Opportunities for Citigroup and Matthews International

0.16

Correlation Coefficient

Citigroup  Matthews International

Average diversification

The 3 months correlation between Citigroup and Matthews is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Matthews International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews 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 Matthews International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matthews International has no effect on the direction of Citigroup i.e., Citigroup and Matthews International go up and down completely randomly.

Pair Corralation between Citigroup and Matthews International

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.6 times more return on investment than Matthews International. However, Citigroup is 1.67 times less risky than Matthews International. It trades about 0.17 of its potential returns per unit of risk. Matthews International is currently generating about 0.02 per unit of risk. If you would invest  8,501  in Citigroup on July 8, 2025 and sell it today you would earn a total of  1,273  from holding Citigroup or generate 14.97% return on investment over 90 days.

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

Citigroup  vs.  Matthews International

Citigroup

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 12 (%) 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.

Matthews International

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Matthews International are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Matthews International is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Citigroup and Matthews International

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

The idea behind Citigroup and Matthews 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.