Correlation Between Citigroup and Actia
Can any of the company-specific risk be diversified away by investing in both Citigroup and Actia 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 Actia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Actia Group, you can compare the effects of market volatilities on Citigroup and Actia 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 Actia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Actia.
Diversification Opportunities for Citigroup and Actia
Excellent diversification
The 3 months correlation between Citigroup and Actia is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Actia Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Actia Group 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 Actia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Actia Group has no effect on the direction of Citigroup i.e., Citigroup and Actia go up and down completely randomly.
Pair Corralation between Citigroup and Actia
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.6 times more return on investment than Actia. However, Citigroup is 1.67 times less risky than Actia. It trades about 0.26 of its potential returns per unit of risk. Actia Group is currently generating about -0.24 per unit of risk. If you would invest 6,361 in Citigroup on September 1, 2024 and sell it today you would earn a total of 726.00 from holding Citigroup or generate 11.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
Citigroup vs. Actia Group
Performance |
| Timeline |
| Citigroup |
| Actia Group |
Citigroup and Actia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Actia
The main advantage of trading using opposite Citigroup and Actia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Actia 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 Actia will offset losses from the drop in Actia's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Actia vs. Metalliance SA | Actia vs. Technip Energies BV | Actia vs. ZCCM Investments Holdings | Actia vs. Guandao Puer Investment |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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