Correlation Between Citigroup and Transkon Jaya

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

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

Diversification Opportunities for Citigroup and Transkon Jaya

-0.61

Correlation Coefficient

Citigroup  Transkon Jaya

Excellent diversification

The 3 months correlation between Citigroup and Transkon is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Transkon Jaya Pt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transkon Jaya Pt 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 Transkon Jaya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transkon Jaya Pt has no effect on the direction of Citigroup i.e., Citigroup and Transkon Jaya go up and down completely randomly.

Pair Corralation between Citigroup and Transkon Jaya

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.34 times more return on investment than Transkon Jaya. However, Citigroup is 1.34 times more volatile than Transkon Jaya Pt. It trades about 0.13 of its potential returns per unit of risk. Transkon Jaya Pt is currently generating about -0.09 per unit of risk. If you would invest  6,205  in Citigroup on September 29, 2024 and sell it today you would earn a total of  895.00  from holding Citigroup or generate 14.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Citigroup  vs.  Transkon Jaya Pt

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.

Transkon Jaya Pt

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Transkon Jaya Pt has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Citigroup and Transkon Jaya

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

The idea behind Citigroup and Transkon Jaya Pt 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.