Correlation Between Citigroup and Stringer Growth

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

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

Diversification Opportunities for Citigroup and Stringer Growth

0.62

Correlation Coefficient

Citigroup  Stringer Growth

Poor diversification

The 3 months correlation between Citigroup and Stringer is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Stringer Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stringer Growth 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 Stringer Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stringer Growth has no effect on the direction of Citigroup i.e., Citigroup and Stringer Growth go up and down completely randomly.

Pair Corralation between Citigroup and Stringer Growth

Taking into account the 90-day investment horizon Citigroup is expected to generate 2.99 times more return on investment than Stringer Growth. However, Citigroup is 2.99 times more volatile than Stringer Growth Fund. It trades about 0.38 of its potential returns per unit of risk. Stringer Growth Fund is currently generating about 0.26 per unit of risk. If you would invest  6,774  in Citigroup on April 26, 2025 and sell it today you would earn a total of  2,765  from holding Citigroup or generate 40.82% return on investment over 90 days.

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

Citigroup  vs.  Stringer Growth Fund

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.

Stringer Growth

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Stringer Growth Fund are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Stringer Growth may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Citigroup and Stringer Growth

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

The idea behind Citigroup and Stringer Growth Fund 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.

Check out your portfolio center.

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 Bonds Directory module to find actively traded corporate debentures issued by US companies.