Correlation Between Citigroup and Danya Cebus

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

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

Diversification Opportunities for Citigroup and Danya Cebus

0.84

Correlation Coefficient

Citigroup  Danya Cebus

Very poor diversification

The 3 months correlation between Citigroup and Danya is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Danya Cebus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danya Cebus 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 Danya Cebus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danya Cebus has no effect on the direction of Citigroup i.e., Citigroup and Danya Cebus go up and down completely randomly.

Pair Corralation between Citigroup and Danya Cebus

Taking into account the 90-day investment horizon Citigroup is expected to generate 3.3 times less return on investment than Danya Cebus. But when comparing it to its historical volatility, Citigroup is 1.13 times less risky than Danya Cebus. It trades about 0.13 of its potential returns per unit of risk. Danya Cebus is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest  850,191  in Danya Cebus on September 28, 2024 and sell it today you would earn a total of  342,809  from holding Danya Cebus or generate 40.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	73.02%
Values	Daily Returns

Citigroup  vs.  Danya Cebus

Citigroup

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Danya Cebus

Risk-Adjusted Performance

28 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Danya Cebus are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Danya Cebus sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Danya Cebus

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

The idea behind Citigroup and Danya Cebus 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.