Correlation Between Barclays Plc and Citigroup

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Barclays Plc and Citigroup 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 Barclays Plc and Citigroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barclays Plc ADR and Citigroup, you can compare the effects of market volatilities on Barclays Plc and Citigroup 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 Barclays Plc with a short position of Citigroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barclays Plc and Citigroup.

Diversification Opportunities for Barclays Plc and Citigroup

0.69
  Correlation Coefficient

Poor diversification

The 3 months correlation between Barclays and Citigroup is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Barclays Plc ADR and Citigroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup and Barclays Plc 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 Barclays Plc ADR are associated (or correlated) with Citigroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citigroup has no effect on the direction of Barclays Plc i.e., Barclays Plc and Citigroup go up and down completely randomly.

Pair Corralation between Barclays Plc and Citigroup

Considering the 90-day investment horizon Barclays Plc ADR is expected to generate 1.28 times more return on investment than Citigroup. However, Barclays Plc is 1.28 times more volatile than Citigroup. It trades about 0.05 of its potential returns per unit of risk. Citigroup is currently generating about 0.02 per unit of risk. If you would invest  552.00  in Barclays Plc ADR on May 14, 2022 and sell it today you would earn a total of  293.00  from holding Barclays Plc ADR or generate 53.08% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Barclays Plc ADR  vs.  Citigroup

 Performance (%) 
       Timeline  
Barclays Plc ADR 
Barclays Performance
5 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Barclays Plc ADR are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak fundamental indicators, Barclays Plc reported solid returns over the last few months and may actually be approaching a breakup point.

Barclays Price Channel

Citigroup 
Citigroup Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Citigroup sustained solid returns over the last few months and may actually be approaching a breakup point.

Citigroup Price Channel

Barclays Plc and Citigroup Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Barclays Plc and Citigroup

The main advantage of trading using opposite Barclays Plc and Citigroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barclays Plc position performs unexpectedly, Citigroup 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 will offset losses from the drop in Citigroup's long position.
The idea behind Barclays Plc ADR and Citigroup 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.
Check out your portfolio center. 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.

Other Complementary Tools

Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Go
Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Go
Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.
Go
ETF Directory
Find actively traded Exchange Traded Funds (ETF) from around the world
Go
Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
Go
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Go
Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon
Go
Money Managers
Screen money managers from public funds and ETFs managed around the world
Go
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
Go
Price Transformation
Use Price Transformation models to analyze depth of different equity instruments across global markets
Go
Positions Ratings
Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Go
Balance Of Power
Check stock momentum by analyzing Balance Of Power indicator and other technical ratios
Go