Correlation Between Citigroup and First Commonwealth

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

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

Diversification Opportunities for Citigroup and First Commonwealth

-0.16

Correlation Coefficient

Citigroup  First Commonwealth

Good diversification

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

Pair Corralation between Citigroup and First Commonwealth

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.89 times more return on investment than First Commonwealth. However, Citigroup is 1.13 times less risky than First Commonwealth. It trades about 0.06 of its potential returns per unit of risk. First Commonwealth Financial is currently generating about -0.07 per unit of risk. If you would invest  9,515  in Citigroup on August 26, 2025 and sell it today you would earn a total of  454.00  from holding Citigroup or generate 4.77% return on investment over 90 days.

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

Citigroup  vs.  First Commonwealth Financial

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.

First Commonwealth

Risk-Adjusted Performance

Weakest

Over the last 90 days First Commonwealth Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Citigroup and First Commonwealth

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

The idea behind Citigroup and First Commonwealth Financial 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.