Correlation Between CITIGROUP CDR and E Split

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

By analyzing existing cross correlation between CITIGROUP CDR and E Split Corp, you can compare the effects of market volatilities on CITIGROUP CDR and E Split 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 E Split. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITIGROUP CDR and E Split.

Diversification Opportunities for CITIGROUP CDR and E Split

-0.81

Correlation Coefficient

CITIGROUP CDR  E Split

Pay attention - limited upside

The 3 months correlation between CITIGROUP and ENS-PA is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding CITIGROUP CDR and E Split Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E Split Corp 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 E Split. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E Split Corp has no effect on the direction of CITIGROUP CDR i.e., CITIGROUP CDR and E Split go up and down completely randomly.

Pair Corralation between CITIGROUP CDR and E Split

Assuming the 90 days trading horizon CITIGROUP CDR is expected to generate 6.04 times more return on investment than E Split. However, CITIGROUP CDR is 6.04 times more volatile than E Split Corp. It trades about 0.37 of its potential returns per unit of risk. E Split Corp is currently generating about -0.21 per unit of risk. If you would invest  2,859  in CITIGROUP CDR on April 25, 2025 and sell it today you would earn a total of  1,160  from holding CITIGROUP CDR or generate 40.57% return on investment over 90 days.

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

CITIGROUP CDR  vs.  E Split Corp

CITIGROUP CDR

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in CITIGROUP CDR are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal technical and fundamental indicators, CITIGROUP CDR exhibited solid returns over the last few months and may actually be approaching a breakup point.

E Split Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days E Split Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, E Split is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with CITIGROUP CDR and E Split

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

The idea behind CITIGROUP CDR and E Split Corp 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.