Correlation Between Citigroup and EPR Properties

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

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

Diversification Opportunities for Citigroup and EPR Properties

-0.16

Correlation Coefficient

Citigroup  EPR Properties

Good diversification

The 3 months correlation between Citigroup and EPR is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and EPR Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EPR Properties 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 EPR Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EPR Properties has no effect on the direction of Citigroup i.e., Citigroup and EPR Properties go up and down completely randomly.

Pair Corralation between Citigroup and EPR Properties

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.93 times more return on investment than EPR Properties. However, Citigroup is 1.07 times less risky than EPR Properties. It trades about 0.15 of its potential returns per unit of risk. EPR Properties is currently generating about -0.01 per unit of risk. If you would invest  9,530  in Citigroup on September 8, 2025 and sell it today you would earn a total of  1,358  from holding Citigroup or generate 14.25% return on investment over 90 days.

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

Citigroup  vs.  EPR Properties

Citigroup

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

EPR Properties

Risk-Adjusted Performance

Weakest

Over the last 90 days EPR Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, EPR Properties is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Citigroup and EPR Properties

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

The idea behind Citigroup and EPR Properties 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.