Correlation Between Citigroup and Healthequity

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

Diversification Opportunities for Citigroup and Healthequity

0.49
  Correlation Coefficient

Very weak diversification

The 23 months correlation between Citigroup and Healthequity is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Healthequity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthequity and Citigroup 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 are associated (or correlated) with Healthequity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healthequity has no effect on the direction of Citigroup i.e., Citigroup and Healthequity go up and down completely randomly.

Pair Corralation between Citigroup and Healthequity

Taking into account the 90-day investment horizon Citigroup is expected to under-perform the Healthequity. In addition to that, Citigroup is 1.06 times more volatile than Healthequity. It trades about -0.02 of its total potential returns per unit of risk. Healthequity is currently generating about 0.05 per unit of volatility. If you would invest  6,405  in Healthequity on March 29, 2022 and sell it today you would earn a total of  270.00  from holding Healthequity or generate 4.22% return on investment over 90 days.
Time Period23 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Citigroup  vs.  Healthequity

 Performance (%) 
      Timeline 
Citigroup 
Citigroup Performance
0 of 100
Over the last 90 days Citigroup has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Citigroup is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0439
Payout Ratio
0.24
Last Split Factor
1:10
Forward Annual Dividend Rate
2.04
Dividend Date
2022-05-27
Ex Dividend Date
2022-04-29
Last Split Date
2011-05-09

Citigroup Price Channel

Healthequity 
Healthequity Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Healthequity are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Healthequity is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Healthequity Price Channel

Citigroup and Healthequity Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Citigroup and Healthequity

The main advantage of trading using opposite Citigroup and Healthequity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Healthequity 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 Healthequity will offset losses from the drop in Healthequity's long position.
The idea behind Citigroup and Healthequity 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 Commodity Channel Index module to use Commodity Channel Index to analyze current equity momentum.

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