Correlation Between Citigroup and Camuzzi Gas

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

By analyzing existing cross correlation between Citigroup and Camuzzi Gas Pampeana, you can compare the effects of market volatilities on Citigroup and Camuzzi Gas 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 Camuzzi Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Camuzzi Gas.

Diversification Opportunities for Citigroup and Camuzzi Gas

0.83

Correlation Coefficient

Citigroup  Camuzzi Gas

Very poor diversification

The 3 months correlation between Citigroup and Camuzzi is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Camuzzi Gas Pampeana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camuzzi Gas Pampeana 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 Camuzzi Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camuzzi Gas Pampeana has no effect on the direction of Citigroup i.e., Citigroup and Camuzzi Gas go up and down completely randomly.

Pair Corralation between Citigroup and Camuzzi Gas

Taking into account the 90-day investment horizon Citigroup is expected to generate 2.82 times less return on investment than Camuzzi Gas. But when comparing it to its historical volatility, Citigroup is 2.01 times less risky than Camuzzi Gas. It trades about 0.18 of its potential returns per unit of risk. Camuzzi Gas Pampeana is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  202,000  in Camuzzi Gas Pampeana on September 16, 2024 and sell it today you would earn a total of  149,500  from holding Camuzzi Gas Pampeana or generate 74.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.46%
Values	Daily Returns

Citigroup  vs.  Camuzzi Gas Pampeana

Citigroup

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Camuzzi Gas Pampeana

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Camuzzi Gas Pampeana are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Camuzzi Gas sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Camuzzi Gas

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

The idea behind Citigroup and Camuzzi Gas Pampeana 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 the Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.