Correlation Between Citigroup and PT Adaro
Can any of the company-specific risk be diversified away by investing in both Citigroup and PT Adaro 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 PT Adaro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and PT Adaro Energy, you can compare the effects of market volatilities on Citigroup and PT Adaro 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 PT Adaro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and PT Adaro.
Diversification Opportunities for Citigroup and PT Adaro
Very good diversification
The 3 months correlation between Citigroup and A64 is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and PT Adaro Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Adaro Energy 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 PT Adaro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Adaro Energy has no effect on the direction of Citigroup i.e., Citigroup and PT Adaro go up and down completely randomly.
Pair Corralation between Citigroup and PT Adaro
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.26 times more return on investment than PT Adaro. However, Citigroup is 3.79 times less risky than PT Adaro. It trades about 0.32 of its potential returns per unit of risk. PT Adaro Energy is currently generating about -0.22 per unit of risk. If you would invest 6,235 in Citigroup on September 5, 2024 and sell it today you would earn a total of 915.00 from holding Citigroup or generate 14.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Citigroup vs. PT Adaro Energy
Performance |
| Timeline |
| Citigroup |
| PT Adaro Energy |
Citigroup and PT Adaro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and PT Adaro
The main advantage of trading using opposite Citigroup and PT Adaro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, PT Adaro 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 PT Adaro will offset losses from the drop in PT Adaro's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| PT Adaro vs. PT Bayan Resources | PT Adaro vs. Yanzhou Coal Mining | PT Adaro vs. Yanzhou Coal Mining | PT Adaro vs. PT Bumi Resources |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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