Correlation Between Citigroup and MFC Asset

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

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

Diversification Opportunities for Citigroup and MFC Asset

-0.39

Correlation Coefficient

Citigroup  MFC Asset

Very good diversification

The 3 months correlation between Citigroup and MFC is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and MFC Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFC Asset Management 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 MFC Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFC Asset Management has no effect on the direction of Citigroup i.e., Citigroup and MFC Asset go up and down completely randomly.

Pair Corralation between Citigroup and MFC Asset

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.51 times more return on investment than MFC Asset. However, Citigroup is 1.95 times less risky than MFC Asset. It trades about 0.28 of its potential returns per unit of risk. MFC Asset Management is currently generating about -0.01 per unit of risk. If you would invest  7,098  in Citigroup on May 9, 2025 and sell it today you would earn a total of  2,025  from holding Citigroup or generate 28.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

Citigroup  vs.  MFC Asset Management

Citigroup

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 21 (%) 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.

MFC Asset Management

Risk-Adjusted Performance

Weakest

Over the last 90 days MFC Asset Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, MFC Asset is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Citigroup and MFC Asset

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

The idea behind Citigroup and MFC Asset Management 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.