Correlation Between Citigroup and Koza Polyester

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

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

Diversification Opportunities for Citigroup and Koza Polyester

0.13

Correlation Coefficient

Citigroup  Koza Polyester

Average diversification

The 3 months correlation between Citigroup and Koza is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Koza Polyester Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koza Polyester Sanayi 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 Koza Polyester. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koza Polyester Sanayi has no effect on the direction of Citigroup i.e., Citigroup and Koza Polyester go up and down completely randomly.

Pair Corralation between Citigroup and Koza Polyester

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.61 times more return on investment than Koza Polyester. However, Citigroup is 1.63 times less risky than Koza Polyester. It trades about 0.1 of its potential returns per unit of risk. Koza Polyester Sanayi is currently generating about 0.02 per unit of risk. If you would invest  6,203  in Citigroup on September 21, 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 Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Citigroup  vs.  Koza Polyester Sanayi

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.

Koza Polyester Sanayi

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Koza Polyester Sanayi are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Koza Polyester is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Citigroup and Koza Polyester

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

The idea behind Citigroup and Koza Polyester Sanayi 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.