Correlation Between Citigroup and SLR Investment

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

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

Diversification Opportunities for Citigroup and SLR Investment

0.81

Correlation Coefficient

Citigroup  SLR Investment

Very poor diversification

The 3 months correlation between Citigroup and SLR is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and SLR Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SLR Investment Corp 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 SLR Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SLR Investment Corp has no effect on the direction of Citigroup i.e., Citigroup and SLR Investment go up and down completely randomly.

Pair Corralation between Citigroup and SLR Investment

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.62 times more return on investment than SLR Investment. However, Citigroup is 1.62 times more volatile than SLR Investment Corp. It trades about 0.44 of its potential returns per unit of risk. SLR Investment Corp is currently generating about 0.19 per unit of risk. If you would invest  6,219  in Citigroup on April 20, 2025 and sell it today you would earn a total of  3,126  from holding Citigroup or generate 50.27% return on investment over 90 days.

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

Citigroup  vs.  SLR Investment Corp

Citigroup

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 34 (%) 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.

SLR Investment Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SLR Investment Corp are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, SLR Investment may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Citigroup and SLR Investment

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

The idea behind Citigroup and SLR Investment Corp 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.