Correlation Between Citigroup and Villa Kunalai

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

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

Diversification Opportunities for Citigroup and Villa Kunalai

-0.84

Correlation Coefficient

Citigroup  Villa Kunalai

Pay attention - limited upside

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

Pair Corralation between Citigroup and Villa Kunalai

Taking into account the 90-day investment horizon Citigroup is expected to generate 15.49 times less return on investment than Villa Kunalai. But when comparing it to its historical volatility, Citigroup is 28.05 times less risky than Villa Kunalai. It trades about 0.07 of its potential returns per unit of risk. Villa Kunalai Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  227.00  in Villa Kunalai Public on September 24, 2024 and sell it today you would lose (105.00) from holding Villa Kunalai Public or give up 46.26% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	96.98%
Values	Daily Returns

Citigroup  vs.  Villa Kunalai Public

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.

Villa Kunalai Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Villa Kunalai Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Citigroup and Villa Kunalai

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

The idea behind Citigroup and Villa Kunalai Public 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.