Correlation Between Citigroup and Socit Htelire

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

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

Diversification Opportunities for Citigroup and Socit Htelire

-0.48

Correlation Coefficient

Citigroup  Socit Htelire

Very good diversification

The 3 months correlation between Citigroup and Socit is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Socit Htelire et in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Socit Htelire et 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 Socit Htelire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Socit Htelire et has no effect on the direction of Citigroup i.e., Citigroup and Socit Htelire go up and down completely randomly.

Pair Corralation between Citigroup and Socit Htelire

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.63 times more return on investment than Socit Htelire. However, Citigroup is 1.6 times less risky than Socit Htelire. It trades about 0.08 of its potential returns per unit of risk. Socit Htelire et is currently generating about 0.0 per unit of risk. If you would invest  4,091  in Citigroup on September 14, 2024 and sell it today you would earn a total of  3,105  from holding Citigroup or generate 75.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.15%
Values	Daily Returns

Citigroup  vs.  Socit Htelire et

Citigroup

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 14 (%) 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.

Socit Htelire et

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Socit Htelire et has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Socit Htelire is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Citigroup and Socit Htelire

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

The idea behind Citigroup and Socit Htelire et 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.