Correlation Between Pason Systems and CITIGROUP CDR

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

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

Diversification Opportunities for Pason Systems and CITIGROUP CDR

-0.36

Correlation Coefficient

Pason Systems  CITIGROUP CDR

Very good diversification

The 3 months correlation between Pason and CITIGROUP is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Pason Systems and CITIGROUP CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIGROUP CDR and Pason Systems 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 Pason Systems are associated (or correlated) with CITIGROUP CDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIGROUP CDR has no effect on the direction of Pason Systems i.e., Pason Systems and CITIGROUP CDR go up and down completely randomly.

Pair Corralation between Pason Systems and CITIGROUP CDR

Assuming the 90 days trading horizon Pason Systems is expected to under-perform the CITIGROUP CDR. In addition to that, Pason Systems is 1.14 times more volatile than CITIGROUP CDR. It trades about -0.04 of its total potential returns per unit of risk. CITIGROUP CDR is currently generating about 0.22 per unit of volatility. If you would invest  3,615  in CITIGROUP CDR on July 1, 2025 and sell it today you would earn a total of  688.00  from holding CITIGROUP CDR or generate 19.03% return on investment over 90 days.

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

Pason Systems  vs.  CITIGROUP CDR

Pason Systems

Risk-Adjusted Performance

Weakest

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

CITIGROUP CDR

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CITIGROUP CDR are ranked lower than 16 (%) 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.

Pair Trading with Pason Systems and CITIGROUP CDR

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

The idea behind Pason Systems and CITIGROUP 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.