Correlation Between Citigroup and Reading International

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

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

Diversification Opportunities for Citigroup and Reading International

-0.12

Correlation Coefficient

Citigroup  Reading International

Good diversification

The 3 months correlation between Citigroup and Reading is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Reading International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reading International 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 Reading International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reading International has no effect on the direction of Citigroup i.e., Citigroup and Reading International go up and down completely randomly.

Pair Corralation between Citigroup and Reading International

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.47 times more return on investment than Reading International. However, Citigroup is 2.13 times less risky than Reading International. It trades about 0.37 of its potential returns per unit of risk. Reading International is currently generating about 0.03 per unit of risk. If you would invest  6,760  in Citigroup on May 1, 2025 and sell it today you would earn a total of  2,688  from holding Citigroup or generate 39.76% return on investment over 90 days.

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

Citigroup  vs.  Reading International

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.

Reading International

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Reading International are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak fundamental indicators, Reading International may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Citigroup and Reading International

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

The idea behind Citigroup and Reading International 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 Commodity Directory module to find actively traded commodities issued by global exchanges.