Correlation Between Citigroup and Acerinox
Can any of the company-specific risk be diversified away by investing in both Citigroup and Acerinox 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 Acerinox into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Acerinox SA ADR, you can compare the effects of market volatilities on Citigroup and Acerinox 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 Acerinox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Acerinox.
Diversification Opportunities for Citigroup and Acerinox
Very good diversification
The 3 months correlation between Citigroup and Acerinox is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Acerinox SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acerinox SA ADR 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 Acerinox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acerinox SA ADR has no effect on the direction of Citigroup i.e., Citigroup and Acerinox go up and down completely randomly.
Pair Corralation between Citigroup and Acerinox
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.69 times more return on investment than Acerinox. However, Citigroup is 1.45 times less risky than Acerinox. It trades about 0.25 of its potential returns per unit of risk. Acerinox SA ADR is currently generating about 0.03 per unit of risk. If you would invest 6,360 in Citigroup on August 28, 2024 and sell it today you would earn a total of 715.00 from holding Citigroup or generate 11.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Acerinox SA ADR
Performance |
| Timeline |
| Citigroup |
| Acerinox SA ADR |
Citigroup and Acerinox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Acerinox
The main advantage of trading using opposite Citigroup and Acerinox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Acerinox 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 Acerinox will offset losses from the drop in Acerinox's long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
| Acerinox vs. Algoma Steel Group | Acerinox vs. Synalloy | Acerinox vs. Algoma Steel Group | Acerinox vs. Aperam PK |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |