Correlation Between CITIGROUP CDR and INTEL CDR

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

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

Diversification Opportunities for CITIGROUP CDR and INTEL CDR

0.75

Correlation Coefficient

CITIGROUP CDR  INTEL CDR

Poor diversification

The 3 months correlation between CITIGROUP and INTEL is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding CITIGROUP CDR and INTEL CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTEL CDR 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 INTEL CDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTEL CDR has no effect on the direction of CITIGROUP CDR i.e., CITIGROUP CDR and INTEL CDR go up and down completely randomly.

Pair Corralation between CITIGROUP CDR and INTEL CDR

Assuming the 90 days trading horizon CITIGROUP CDR is expected to generate 0.56 times more return on investment than INTEL CDR. However, CITIGROUP CDR is 1.8 times less risky than INTEL CDR. It trades about 0.37 of its potential returns per unit of risk. INTEL CDR is currently generating about 0.02 per unit of risk. If you would invest  2,853  in CITIGROUP CDR on April 30, 2025 and sell it today you would earn a total of  1,148  from holding CITIGROUP CDR or generate 40.24% return on investment over 90 days.

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

CITIGROUP CDR  vs.  INTEL CDR

CITIGROUP CDR

Risk-Adjusted Performance

Strong

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

INTEL CDR

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in INTEL CDR are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, INTEL CDR is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with CITIGROUP CDR and INTEL CDR

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

The idea behind CITIGROUP CDR and INTEL CDR 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.