Correlation Between Citigroup and Smallcap Growth

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

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

Diversification Opportunities for Citigroup and Smallcap Growth

0.67

Correlation Coefficient

Citigroup  Smallcap Growth

Poor diversification

The 3 months correlation between Citigroup and Smallcap is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Smallcap Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smallcap Growth 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 Smallcap Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smallcap Growth has no effect on the direction of Citigroup i.e., Citigroup and Smallcap Growth go up and down completely randomly.

Pair Corralation between Citigroup and Smallcap Growth

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.09 times less return on investment than Smallcap Growth. In addition to that, Citigroup is 1.16 times more volatile than Smallcap Growth Fund. It trades about 0.08 of its total potential returns per unit of risk. Smallcap Growth Fund is currently generating about 0.1 per unit of volatility. If you would invest  1,536  in Smallcap Growth Fund on August 14, 2025 and sell it today you would earn a total of  122.00  from holding Smallcap Growth Fund or generate 7.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Citigroup  vs.  Smallcap Growth Fund

Citigroup

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile fundamental indicators, Citigroup may actually be approaching a critical reversion point that can send shares even higher in December 2025.

Smallcap Growth

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Smallcap Growth Fund are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Smallcap Growth may actually be approaching a critical reversion point that can send shares even higher in December 2025.

Pair Trading with Citigroup and Smallcap Growth

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

The idea behind Citigroup and Smallcap Growth Fund 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.