Correlation Between Citigroup and EPAM Systems

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

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

Diversification Opportunities for Citigroup and EPAM Systems

-0.02

Correlation Coefficient

Citigroup  EPAM Systems

Good diversification

The 3 months correlation between Citigroup and EPAM is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and EPAM Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EPAM Systems 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 EPAM Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EPAM Systems has no effect on the direction of Citigroup i.e., Citigroup and EPAM Systems go up and down completely randomly.

Pair Corralation between Citigroup and EPAM Systems

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.68 times less return on investment than EPAM Systems. But when comparing it to its historical volatility, Citigroup is 1.56 times less risky than EPAM Systems. It trades about 0.06 of its potential returns per unit of risk. EPAM Systems is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  17,028  in EPAM Systems on August 26, 2025 and sell it today you would earn a total of  1,295  from holding EPAM Systems or generate 7.61% return on investment over 90 days.

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

Citigroup  vs.  EPAM Systems

Citigroup

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Citigroup is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

EPAM Systems

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in EPAM Systems are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, EPAM Systems may actually be approaching a critical reversion point that can send shares even higher in December 2025.

Pair Trading with Citigroup and EPAM Systems

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

The idea behind Citigroup and EPAM Systems 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.