Correlation Between Citigroup and BRB Banco

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

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

Diversification Opportunities for Citigroup and BRB Banco

-0.81

Correlation Coefficient

Citigroup  BRB Banco

Pay attention - limited upside

The 3 months correlation between Citigroup and BRB is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and BRB Banco de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRB Banco de 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 BRB Banco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRB Banco de has no effect on the direction of Citigroup i.e., Citigroup and BRB Banco go up and down completely randomly.

Pair Corralation between Citigroup and BRB Banco

Assuming the 90 days trading horizon Citigroup is expected to generate 0.96 times more return on investment than BRB Banco. However, Citigroup is 1.04 times less risky than BRB Banco. It trades about 0.21 of its potential returns per unit of risk. BRB Banco de is currently generating about -0.18 per unit of risk. If you would invest  5,659  in Citigroup on September 4, 2024 and sell it today you would earn a total of  1,533  from holding Citigroup or generate 27.09% return on investment over 90 days.

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

Citigroup  vs.  BRB Banco de

Citigroup

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Citigroup sustained solid returns over the last few months and may actually be approaching a breakup point.

BRB Banco de

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BRB Banco de has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Citigroup and BRB Banco

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

The idea behind Citigroup and BRB Banco de 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.