Correlation Between Citigroup and Bank of NT

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

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

Diversification Opportunities for Citigroup and Bank of NT

0.89

Correlation Coefficient

Citigroup  Bank of NT

Very poor diversification

The 3 months correlation between Citigroup and Bank is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Bank of NT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of NT 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 Bank of NT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of NT has no effect on the direction of Citigroup i.e., Citigroup and Bank of NT go up and down completely randomly.

Pair Corralation between Citigroup and Bank of NT

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.31 times more return on investment than Bank of NT. However, Citigroup is 1.31 times more volatile than Bank of NT. It trades about 0.29 of its potential returns per unit of risk. Bank of NT is currently generating about 0.14 per unit of risk. If you would invest  7,024  in Citigroup on May 3, 2025 and sell it today you would earn a total of  2,159  from holding Citigroup or generate 30.74% return on investment over 90 days.

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

Citigroup  vs.  Bank of NT

Citigroup

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Bank of NT

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bank of NT are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Bank of NT may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Citigroup and Bank of NT

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

The idea behind Citigroup and Bank of NT 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.