Correlation Between Citigroup and Indo Pureco

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

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

Diversification Opportunities for Citigroup and Indo Pureco

0.0

Correlation Coefficient

Citigroup  Indo Pureco

Pay attention - limited upside

The 3 months correlation between Citigroup and Indo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Indo Pureco Pratama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indo Pureco Pratama 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 Indo Pureco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indo Pureco Pratama has no effect on the direction of Citigroup i.e., Citigroup and Indo Pureco go up and down completely randomly.

Pair Corralation between Citigroup and Indo Pureco

If you would invest  5,788  in Citigroup on September 16, 2024 and sell it today you would earn a total of  1,313  from holding Citigroup or generate 22.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	96.92%
Values	Daily Returns

Citigroup  vs.  Indo Pureco Pratama

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.

Indo Pureco Pratama

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Indo Pureco Pratama has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Indo Pureco is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Citigroup and Indo Pureco

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

The idea behind Citigroup and Indo Pureco Pratama 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.