Correlation Between Citigroup and Euro Trend

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

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

Diversification Opportunities for Citigroup and Euro Trend

-0.41

Correlation Coefficient

Citigroup  Euro Trend

Very good diversification

The 3 months correlation between Citigroup and Euro is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Euro Trend Yatirim in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Euro Trend Yatirim 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 Euro Trend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Euro Trend Yatirim has no effect on the direction of Citigroup i.e., Citigroup and Euro Trend go up and down completely randomly.

Pair Corralation between Citigroup and Euro Trend

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.7 times more return on investment than Euro Trend. However, Citigroup is 1.42 times less risky than Euro Trend. It trades about 0.1 of its potential returns per unit of risk. Euro Trend Yatirim is currently generating about -0.08 per unit of risk. If you would invest  6,203  in Citigroup on September 22, 2024 and sell it today you would earn a total of  716.00  from holding Citigroup or generate 11.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Citigroup  vs.  Euro Trend Yatirim

Citigroup

Risk-Adjusted Performance

7 of 100

OK

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. In spite of rather unfluctuating fundamental indicators, Citigroup may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Euro Trend Yatirim

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Euro Trend Yatirim has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Citigroup and Euro Trend

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

The idea behind Citigroup and Euro Trend Yatirim 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.