Correlation Between Citigroup and Arcus Biosciences

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

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

Diversification Opportunities for Citigroup and Arcus Biosciences

0.89

Correlation Coefficient

Citigroup  Arcus Biosciences

Very poor diversification

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

Pair Corralation between Citigroup and Arcus Biosciences

Taking into account the 90-day investment horizon Citigroup is expected to generate 2.52 times less return on investment than Arcus Biosciences. But when comparing it to its historical volatility, Citigroup is 2.27 times less risky than Arcus Biosciences. It trades about 0.22 of its potential returns per unit of risk. Arcus Biosciences is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  836.00  in Arcus Biosciences on July 1, 2025 and sell it today you would earn a total of  485.50  from holding Arcus Biosciences or generate 58.07% return on investment over 90 days.

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

Citigroup  vs.  Arcus Biosciences

Citigroup

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 17 (%) 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.

Arcus Biosciences

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Arcus Biosciences are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Arcus Biosciences unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Arcus Biosciences

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

The idea behind Citigroup and Arcus Biosciences 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.