Correlation Between Citigroup and Biomea Fusion
Can any of the company-specific risk be diversified away by investing in both Citigroup and Biomea Fusion 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 Biomea Fusion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Biomea Fusion, you can compare the effects of market volatilities on Citigroup and Biomea Fusion 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 Biomea Fusion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Biomea Fusion.
Diversification Opportunities for Citigroup and Biomea Fusion
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Biomea is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Biomea Fusion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biomea Fusion 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 Biomea Fusion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biomea Fusion has no effect on the direction of Citigroup i.e., Citigroup and Biomea Fusion go up and down completely randomly.
Pair Corralation between Citigroup and Biomea Fusion
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.24 times more return on investment than Biomea Fusion. However, Citigroup is 4.23 times less risky than Biomea Fusion. It trades about 0.06 of its potential returns per unit of risk. Biomea Fusion is currently generating about -0.02 per unit of risk. If you would invest 9,204 in Citigroup on July 20, 2025 and sell it today you would earn a total of 503.00 from holding Citigroup or generate 5.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Biomea Fusion
Performance |
| Timeline |
| Citigroup |
| Biomea Fusion |
Citigroup and Biomea Fusion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Biomea Fusion
The main advantage of trading using opposite Citigroup and Biomea Fusion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Biomea Fusion 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 Biomea Fusion will offset losses from the drop in Biomea Fusion's long position.| Citigroup vs. Mitsubishi UFJ Financial | Citigroup vs. Royal Bank of | Citigroup vs. Bank of America | Citigroup vs. Wells Fargo |
| Biomea Fusion vs. Adverum Biotechnologies | Biomea Fusion vs. Fractyl Health, Common | Biomea Fusion vs. Pliant Therapeutics | Biomea Fusion vs. aTyr Pharma, |
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 the Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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