Correlation Between Citigroup and Ultrainternational

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

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

Diversification Opportunities for Citigroup and Ultrainternational

0.83

Correlation Coefficient

Citigroup  Ultrainternational

Very poor diversification

The 3 months correlation between Citigroup and Ultrainternational is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Ultrainternational Profund Ult in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultrainternational 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 Ultrainternational. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ultrainternational has no effect on the direction of Citigroup i.e., Citigroup and Ultrainternational go up and down completely randomly.

Pair Corralation between Citigroup and Ultrainternational

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.95 times more return on investment than Ultrainternational. However, Citigroup is 1.05 times less risky than Ultrainternational. It trades about 0.37 of its potential returns per unit of risk. Ultrainternational Profund Ultrainternational is currently generating about 0.13 per unit of risk. If you would invest  6,760  in Citigroup on May 1, 2025 and sell it today you would earn a total of  2,688  from holding Citigroup or generate 39.76% return on investment over 90 days.

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

Citigroup  vs.  Ultrainternational Profund Ult

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.

Ultrainternational

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ultrainternational Profund Ultrainternational are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Ultrainternational showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Ultrainternational

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

The idea behind Citigroup and Ultrainternational Profund Ultrainternational 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.