Correlation Between Citigroup and SP Global

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

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

Diversification Opportunities for Citigroup and SP Global

0.8

Correlation Coefficient

Citigroup  SP Global

Very poor diversification

The 3 months correlation between Citigroup and SPGI is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and SP Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SP Global 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 SP Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SP Global has no effect on the direction of Citigroup i.e., Citigroup and SP Global go up and down completely randomly.

Pair Corralation between Citigroup and SP Global

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.56 times more return on investment than SP Global. However, Citigroup is 1.56 times more volatile than SP Global. It trades about 0.39 of its potential returns per unit of risk. SP Global is currently generating about 0.16 per unit of risk. If you would invest  6,789  in Citigroup on April 25, 2025 and sell it today you would earn a total of  2,810  from holding Citigroup or generate 41.39% return on investment over 90 days.

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

Citigroup  vs.  SP Global

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.

SP Global

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SP Global are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent technical and fundamental indicators, SP Global may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Citigroup and SP Global

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

The idea behind Citigroup and SP Global 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.