Correlation Between Citigroup and Rimac Seguros

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Can any of the company-specific risk be diversified away by investing in both Citigroup and Rimac Seguros 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 Rimac Seguros into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Rimac Seguros y, you can compare the effects of market volatilities on Citigroup and Rimac Seguros 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 Rimac Seguros. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Rimac Seguros.

Diversification Opportunities for Citigroup and Rimac Seguros

-0.02
  Correlation Coefficient

Good diversification

The 3 months correlation between Citigroup and Rimac is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Rimac Seguros y in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rimac Seguros y 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 Rimac Seguros. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rimac Seguros y has no effect on the direction of Citigroup i.e., Citigroup and Rimac Seguros go up and down completely randomly.

Pair Corralation between Citigroup and Rimac Seguros

Assuming the 90 days horizon Citigroup is expected to generate 1.39 times more return on investment than Rimac Seguros. However, Citigroup is 1.39 times more volatile than Rimac Seguros y. It trades about 0.09 of its potential returns per unit of risk. Rimac Seguros y is currently generating about 0.02 per unit of risk. If you would invest  5,577  in Citigroup on August 27, 2024 and sell it today you would earn a total of  1,351  from holding Citigroup or generate 24.22% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy56.0%
ValuesDaily Returns

Citigroup  vs.  Rimac Seguros y

 Performance 
       Timeline  
Citigroup 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
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 very unsteady forward indicators, Citigroup displayed solid returns over the last few months and may actually be approaching a breakup point.
Rimac Seguros y 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Rimac Seguros y are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Rimac Seguros may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Citigroup and Rimac Seguros Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Citigroup and Rimac Seguros

The main advantage of trading using opposite Citigroup and Rimac Seguros positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Rimac Seguros 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 Rimac Seguros will offset losses from the drop in Rimac Seguros' long position.
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The idea behind Citigroup and Rimac Seguros y 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 CEOs Directory module to screen CEOs from public companies around the world.

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