Correlation Between Citigroup and Grupo Simec
Can any of the company-specific risk be diversified away by investing in both Citigroup and Grupo Simec 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 Grupo Simec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Grupo Simec SAB, you can compare the effects of market volatilities on Citigroup and Grupo Simec 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 Grupo Simec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Grupo Simec.
Diversification Opportunities for Citigroup and Grupo Simec
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Citigroup and Grupo is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Grupo Simec SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Simec 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 Grupo Simec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Simec SAB has no effect on the direction of Citigroup i.e., Citigroup and Grupo Simec go up and down completely randomly.
Pair Corralation between Citigroup and Grupo Simec
Given the investment horizon of 90 days Citigroup is expected to generate 1.68 times more return on investment than Grupo Simec. However, Citigroup is 1.68 times more volatile than Grupo Simec SAB. It trades about 0.12 of its potential returns per unit of risk. Grupo Simec SAB is currently generating about -0.02 per unit of risk. If you would invest 75,298 in Citigroup on September 12, 2024 and sell it today you would earn a total of 70,865 from holding Citigroup or generate 94.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Grupo Simec SAB
Performance |
| Timeline |
| Citigroup |
| Grupo Simec SAB |
Citigroup and Grupo Simec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Grupo Simec
The main advantage of trading using opposite Citigroup and Grupo Simec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Grupo Simec 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 Grupo Simec will offset losses from the drop in Grupo Simec's long position.| Citigroup vs. Grupo Sports World | Citigroup vs. First Majestic Silver | Citigroup vs. Grupo Hotelero Santa | Citigroup vs. Cognizant Technology Solutions |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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