Correlation Between CITIGROUP CDR and Sun Life

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

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

Diversification Opportunities for CITIGROUP CDR and Sun Life

0.72

Correlation Coefficient

CITIGROUP CDR  Sun Life

Poor diversification

The 3 months correlation between CITIGROUP and Sun is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding CITIGROUP CDR and Sun Life Non in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Life Non 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 Sun Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Life Non has no effect on the direction of CITIGROUP CDR i.e., CITIGROUP CDR and Sun Life go up and down completely randomly.

Pair Corralation between CITIGROUP CDR and Sun Life

Assuming the 90 days trading horizon CITIGROUP CDR is expected to generate 2.04 times more return on investment than Sun Life. However, CITIGROUP CDR is 2.04 times more volatile than Sun Life Non. It trades about 0.41 of its potential returns per unit of risk. Sun Life Non is currently generating about 0.34 per unit of risk. If you would invest  2,620  in CITIGROUP CDR on April 21, 2025 and sell it today you would earn a total of  1,296  from holding CITIGROUP CDR or generate 49.47% return on investment over 90 days.

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

CITIGROUP CDR  vs.  Sun Life Non

CITIGROUP CDR

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in CITIGROUP CDR are ranked lower than 32 (%) 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.

Sun Life Non

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Sun Life Non are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal technical and fundamental indicators, Sun Life sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CITIGROUP CDR and Sun Life

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

The idea behind CITIGROUP CDR and Sun Life Non 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.