Correlation Between Citigroup and Qulitas Controladora
Can any of the company-specific risk be diversified away by investing in both Citigroup and Qulitas Controladora 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 Qulitas Controladora into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Qulitas Controladora SAB, you can compare the effects of market volatilities on Citigroup and Qulitas Controladora 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 Qulitas Controladora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Qulitas Controladora.
Diversification Opportunities for Citigroup and Qulitas Controladora
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Qulitas is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Qulitas Controladora SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qulitas Controladora SAB 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 Qulitas Controladora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qulitas Controladora SAB has no effect on the direction of Citigroup i.e., Citigroup and Qulitas Controladora go up and down completely randomly.
Pair Corralation between Citigroup and Qulitas Controladora
Given the investment horizon of 90 days Citigroup is expected to generate 0.85 times more return on investment than Qulitas Controladora. However, Citigroup is 1.17 times less risky than Qulitas Controladora. It trades about 0.15 of its potential returns per unit of risk. Qulitas Controladora SAB is currently generating about 0.03 per unit of risk. If you would invest 84,519 in Citigroup on November 9, 2024 and sell it today you would earn a total of 83,947 from holding Citigroup or generate 99.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Citigroup vs. Qulitas Controladora SAB
Performance |
| Timeline |
| Citigroup |
| Qulitas Controladora SAB |
Citigroup and Qulitas Controladora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Qulitas Controladora
The main advantage of trading using opposite Citigroup and Qulitas Controladora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Qulitas Controladora 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 Qulitas Controladora will offset losses from the drop in Qulitas Controladora's long position.| Citigroup vs. McEwen Mining | Citigroup vs. Southern Copper | Citigroup vs. Genworth Financial | Citigroup vs. KB Home |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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