Correlation Between CITIGROUP CDR and Canadian Apartment

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Can any of the company-specific risk be diversified away by investing in both CITIGROUP CDR and Canadian Apartment 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 CDR and Canadian Apartment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CITIGROUP CDR and Canadian Apartment Properties, you can compare the effects of market volatilities on CITIGROUP CDR and Canadian Apartment 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 CDR with a short position of Canadian Apartment. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITIGROUP CDR and Canadian Apartment.

Diversification Opportunities for CITIGROUP CDR and Canadian Apartment

0.68
  Correlation Coefficient

Poor diversification

The 3 months correlation between CITIGROUP and Canadian is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding CITIGROUP CDR and Canadian Apartment Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Apartment and CITIGROUP CDR 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 CDR are associated (or correlated) with Canadian Apartment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Apartment has no effect on the direction of CITIGROUP CDR i.e., CITIGROUP CDR and Canadian Apartment go up and down completely randomly.

Pair Corralation between CITIGROUP CDR and Canadian Apartment

Assuming the 90 days trading horizon CITIGROUP CDR is expected to generate 1.21 times more return on investment than Canadian Apartment. However, CITIGROUP CDR is 1.21 times more volatile than Canadian Apartment Properties. It trades about 0.39 of its potential returns per unit of risk. Canadian Apartment Properties is currently generating about 0.14 per unit of risk. If you would invest  2,699  in CITIGROUP CDR on April 22, 2025 and sell it today you would earn a total of  1,217  from holding CITIGROUP CDR or generate 45.09% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

CITIGROUP CDR  vs.  Canadian Apartment Properties

 Performance 
       Timeline  
CITIGROUP CDR 

Risk-Adjusted Performance

Very Strong

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in CITIGROUP CDR are ranked lower than 30 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, CITIGROUP CDR exhibited solid returns over the last few months and may actually be approaching a breakup point.
Canadian Apartment 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Canadian Apartment Properties are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Canadian Apartment may actually be approaching a critical reversion point that can send shares even higher in August 2025.

CITIGROUP CDR and Canadian Apartment Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CITIGROUP CDR and Canadian Apartment

The main advantage of trading using opposite CITIGROUP CDR and Canadian Apartment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITIGROUP CDR position performs unexpectedly, Canadian Apartment 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 Canadian Apartment will offset losses from the drop in Canadian Apartment's long position.
The idea behind CITIGROUP CDR and Canadian Apartment 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.

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