Correlation Between Uniserve Communications and CITIGROUP CDR

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

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

Diversification Opportunities for Uniserve Communications and CITIGROUP CDR

0.91

Correlation Coefficient

Uniserve Communications  CITIGROUP CDR

Almost no diversification

The 3 months correlation between Uniserve and CITIGROUP is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Uniserve Communications Corp and CITIGROUP CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIGROUP CDR and Uniserve Communications 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 Uniserve Communications Corp are associated (or correlated) with CITIGROUP CDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIGROUP CDR has no effect on the direction of Uniserve Communications i.e., Uniserve Communications and CITIGROUP CDR go up and down completely randomly.

Pair Corralation between Uniserve Communications and CITIGROUP CDR

Assuming the 90 days horizon Uniserve Communications Corp is expected to generate 2.76 times more return on investment than CITIGROUP CDR. However, Uniserve Communications is 2.76 times more volatile than CITIGROUP CDR. It trades about 0.27 of its potential returns per unit of risk. CITIGROUP CDR is currently generating about 0.41 per unit of risk. If you would invest  23.00  in Uniserve Communications Corp on April 21, 2025 and sell it today you would earn a total of  22.00  from holding Uniserve Communications Corp or generate 95.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.44%
Values	Daily Returns

Uniserve Communications Corp  vs.  CITIGROUP CDR

Uniserve Communications

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Uniserve Communications Corp are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Uniserve Communications showed solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Uniserve Communications and CITIGROUP CDR

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

The idea behind Uniserve Communications Corp and CITIGROUP CDR 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.