Correlation Between Citigroup and FGV Holdings
Can any of the company-specific risk be diversified away by investing in both Citigroup and FGV Holdings 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 FGV Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and FGV Holdings Bhd, you can compare the effects of market volatilities on Citigroup and FGV Holdings 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 FGV Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and FGV Holdings.
Diversification Opportunities for Citigroup and FGV Holdings
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Citigroup and FGV is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and FGV Holdings Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FGV Holdings Bhd 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 FGV Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FGV Holdings Bhd has no effect on the direction of Citigroup i.e., Citigroup and FGV Holdings go up and down completely randomly.
Pair Corralation between Citigroup and FGV Holdings
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.61 times more return on investment than FGV Holdings. However, Citigroup is 1.63 times less risky than FGV Holdings. It trades about 0.23 of its potential returns per unit of risk. FGV Holdings Bhd is currently generating about -0.29 per unit of risk. If you would invest 6,902 in Citigroup on September 13, 2024 and sell it today you would earn a total of 271.00 from holding Citigroup or generate 3.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Citigroup vs. FGV Holdings Bhd
Performance |
| Timeline |
| Citigroup |
| FGV Holdings Bhd |
Citigroup and FGV Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and FGV Holdings
The main advantage of trading using opposite Citigroup and FGV Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, FGV Holdings 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 FGV Holdings will offset losses from the drop in FGV Holdings' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| FGV Holdings vs. SFP Tech Holdings | FGV Holdings vs. Magni Tech Industries | FGV Holdings vs. Shangri La Hotels | FGV Holdings vs. Icon Offshore Bhd |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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