Correlation Between Citigroup and Ultrashort Mid-cap

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

By analyzing existing cross correlation between Citigroup and Ultrashort Mid Cap Profund, you can compare the effects of market volatilities on Citigroup and Ultrashort Mid-cap 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 Ultrashort Mid-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Ultrashort Mid-cap.

Diversification Opportunities for Citigroup and Ultrashort Mid-cap

-0.82

Correlation Coefficient

Citigroup  Ultrashort Mid-cap

Pay attention - limited upside

The 3 months correlation between Citigroup and Ultrashort is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Ultrashort Mid Cap Profund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultrashort Mid Cap 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 Ultrashort Mid-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ultrashort Mid Cap has no effect on the direction of Citigroup i.e., Citigroup and Ultrashort Mid-cap go up and down completely randomly.

Pair Corralation between Citigroup and Ultrashort Mid-cap

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.76 times more return on investment than Ultrashort Mid-cap. However, Citigroup is 1.31 times less risky than Ultrashort Mid-cap. It trades about 0.38 of its potential returns per unit of risk. Ultrashort Mid Cap Profund is currently generating about -0.2 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  2,750  from holding Citigroup or generate 40.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

Citigroup  vs.  Ultrashort Mid Cap Profund

Citigroup

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 29 (%) 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.

Ultrashort Mid Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ultrashort Mid Cap Profund has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's forward indicators remain fairly strong which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Citigroup and Ultrashort Mid-cap

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

The idea behind Citigroup and Ultrashort Mid Cap Profund 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.