Correlation Between Citigroup and Purecycle Technologies

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

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

Diversification Opportunities for Citigroup and Purecycle Technologies

0.76

Correlation Coefficient

Citigroup  Purecycle Technologies

Poor diversification

The 3 months correlation between Citigroup and Purecycle is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Purecycle Technologies Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Purecycle Technologies 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 Purecycle Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Purecycle Technologies has no effect on the direction of Citigroup i.e., Citigroup and Purecycle Technologies go up and down completely randomly.

Pair Corralation between Citigroup and Purecycle Technologies

Taking into account the 90-day investment horizon Citigroup is expected to generate 2.36 times less return on investment than Purecycle Technologies. But when comparing it to its historical volatility, Citigroup is 3.44 times less risky than Purecycle Technologies. It trades about 0.37 of its potential returns per unit of risk. Purecycle Technologies Holdings is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  666.00  in Purecycle Technologies Holdings on May 1, 2025 and sell it today you would earn a total of  727.50  from holding Purecycle Technologies Holdings or generate 109.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

Citigroup  vs.  Purecycle Technologies Holding

Citigroup

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 29 (%) 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.

Purecycle Technologies

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Purecycle Technologies Holdings are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental indicators, Purecycle Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Purecycle Technologies

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

The idea behind Citigroup and Purecycle Technologies Holdings 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.