Correlation Between Citigroup and NXP Semiconductors

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

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

Diversification Opportunities for Citigroup and NXP Semiconductors

-0.22

Correlation Coefficient

Citigroup  NXP Semiconductors

Very good diversification

The 3 months correlation between Citigroup and NXP is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and NXP Semiconductors NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NXP Semiconductors 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 NXP Semiconductors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NXP Semiconductors has no effect on the direction of Citigroup i.e., Citigroup and NXP Semiconductors go up and down completely randomly.

Pair Corralation between Citigroup and NXP Semiconductors

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.54 times more return on investment than NXP Semiconductors. However, Citigroup is 1.85 times less risky than NXP Semiconductors. It trades about 0.11 of its potential returns per unit of risk. NXP Semiconductors NV is currently generating about 0.02 per unit of risk. If you would invest  9,650  in Citigroup on September 4, 2025 and sell it today you would earn a total of  1,022  from holding Citigroup or generate 10.59% return on investment over 90 days.

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

Citigroup  vs.  NXP Semiconductors NV

Citigroup

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Citigroup may actually be approaching a critical reversion point that can send shares even higher in January 2026.

NXP Semiconductors

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in NXP Semiconductors NV are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, NXP Semiconductors is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Citigroup and NXP Semiconductors

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

The idea behind Citigroup and NXP Semiconductors NV 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.