Correlation Between CITIGROUP CDR and Spectral Med

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

By analyzing existing cross correlation between CITIGROUP CDR and Spectral Med, you can compare the effects of market volatilities on CITIGROUP CDR and Spectral Med 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 CDR with a short position of Spectral Med. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITIGROUP CDR and Spectral Med.

Diversification Opportunities for CITIGROUP CDR and Spectral Med

-0.5

Correlation Coefficient

CITIGROUP CDR  Spectral Med

Very good diversification

The 3 months correlation between CITIGROUP and Spectral is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding CITIGROUP CDR and Spectral Med in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spectral Med and CITIGROUP CDR 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 CDR are associated (or correlated) with Spectral Med. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spectral Med has no effect on the direction of CITIGROUP CDR i.e., CITIGROUP CDR and Spectral Med go up and down completely randomly.

Pair Corralation between CITIGROUP CDR and Spectral Med

Assuming the 90 days trading horizon CITIGROUP CDR is expected to generate 0.75 times more return on investment than Spectral Med. However, CITIGROUP CDR is 1.33 times less risky than Spectral Med. It trades about 0.26 of its potential returns per unit of risk. Spectral Med is currently generating about -0.02 per unit of risk. If you would invest  3,128  in CITIGROUP CDR on May 10, 2025 and sell it today you would earn a total of  753.00  from holding CITIGROUP CDR or generate 24.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

CITIGROUP CDR  vs.  Spectral Med

CITIGROUP CDR

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CITIGROUP CDR are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal technical and fundamental indicators, CITIGROUP CDR exhibited solid returns over the last few months and may actually be approaching a breakup point.

Spectral Med

Risk-Adjusted Performance

Weakest

Over the last 90 days Spectral Med has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Spectral Med is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with CITIGROUP CDR and Spectral Med

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

The idea behind CITIGROUP CDR and Spectral Med 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.