Correlation Between Citigroup and Recursion Pharmaceuticals

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

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

Diversification Opportunities for Citigroup and Recursion Pharmaceuticals

0.47

Correlation Coefficient

Citigroup  Recursion Pharmaceuticals

Very weak diversification

The 3 months correlation between Citigroup and Recursion is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Recursion Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Recursion Pharmaceuticals 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 Recursion Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Recursion Pharmaceuticals has no effect on the direction of Citigroup i.e., Citigroup and Recursion Pharmaceuticals go up and down completely randomly.

Pair Corralation between Citigroup and Recursion Pharmaceuticals

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.26 times more return on investment than Recursion Pharmaceuticals. However, Citigroup is 3.9 times less risky than Recursion Pharmaceuticals. It trades about 0.38 of its potential returns per unit of risk. Recursion Pharmaceuticals is currently generating about 0.06 per unit of risk. If you would invest  6,774  in Citigroup on April 28, 2025 and sell it today you would earn a total of  2,833  from holding Citigroup or generate 41.82% return on investment over 90 days.

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

Citigroup  vs.  Recursion Pharmaceuticals

Citigroup

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 30 (%) 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.

Recursion Pharmaceuticals

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Recursion Pharmaceuticals are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Recursion Pharmaceuticals showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Recursion Pharmaceuticals

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

The idea behind Citigroup and Recursion Pharmaceuticals 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.