Correlation Between Citigroup and Sa Real

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

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

Diversification Opportunities for Citigroup and Sa Real

0.74

Correlation Coefficient

Citigroup  Sa Real

Poor diversification

The 3 months correlation between Citigroup and SAREX is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Sa Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sa Real Estate 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 Sa Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sa Real Estate has no effect on the direction of Citigroup i.e., Citigroup and Sa Real go up and down completely randomly.

Pair Corralation between Citigroup and Sa Real

Taking into account the 90-day investment horizon Citigroup is expected to under-perform the Sa Real. In addition to that, Citigroup is 1.96 times more volatile than Sa Real Estate. It trades about -0.04 of its total potential returns per unit of risk. Sa Real Estate is currently generating about 0.0 per unit of volatility. If you would invest  1,151  in Sa Real Estate on February 17, 2025 and sell it today you would lose (3.00) from holding Sa Real Estate or give up 0.26% of portfolio value over 90 days.

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

Citigroup  vs.  Sa Real Estate

Citigroup

Risk-Adjusted Performance

Very Weak

Over the last 90 days Citigroup has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Sa Real Estate

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sa Real Estate has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Sa Real is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Citigroup and Sa Real

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

The idea behind Citigroup and Sa Real Estate 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.