Correlation Between Citigroup and Telesat Corp

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

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

Diversification Opportunities for Citigroup and Telesat Corp

0.77

Correlation Coefficient

Citigroup  Telesat Corp

Poor diversification

The 3 months correlation between Citigroup and Telesat is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Telesat Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telesat 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 Telesat Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telesat Corp has no effect on the direction of Citigroup i.e., Citigroup and Telesat Corp go up and down completely randomly.

Pair Corralation between Citigroup and Telesat Corp

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.58 times less return on investment than Telesat Corp. But when comparing it to its historical volatility, Citigroup is 2.72 times less risky than Telesat Corp. It trades about 0.29 of its potential returns per unit of risk. Telesat Corp is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  1,600  in Telesat Corp on May 4, 2025 and sell it today you would earn a total of  749.00  from holding Telesat Corp or generate 46.81% return on investment over 90 days.

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

Citigroup  vs.  Telesat Corp

Citigroup

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 22 (%) 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.

Telesat Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Telesat Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Telesat Corp unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Telesat Corp

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

The idea behind Citigroup and Telesat 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.