Correlation Between Citigroup and Atom Empreendimentos
Can any of the company-specific risk be diversified away by investing in both Citigroup and Atom Empreendimentos 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 Atom Empreendimentos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Atom Empreendimentos e, you can compare the effects of market volatilities on Citigroup and Atom Empreendimentos 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 Atom Empreendimentos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Atom Empreendimentos.
Diversification Opportunities for Citigroup and Atom Empreendimentos
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Atom is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Atom Empreendimentos e in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atom Empreendimentos 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 Atom Empreendimentos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atom Empreendimentos has no effect on the direction of Citigroup i.e., Citigroup and Atom Empreendimentos go up and down completely randomly.
Pair Corralation between Citigroup and Atom Empreendimentos
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.94 times less return on investment than Atom Empreendimentos. But when comparing it to its historical volatility, Citigroup is 3.94 times less risky than Atom Empreendimentos. It trades about 0.25 of its potential returns per unit of risk. Atom Empreendimentos e is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 408.00 in Atom Empreendimentos e on August 27, 2024 and sell it today you would earn a total of 60.00 from holding Atom Empreendimentos e or generate 14.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Citigroup vs. Atom Empreendimentos e
Performance |
| Timeline |
| Citigroup |
| Atom Empreendimentos |
Citigroup and Atom Empreendimentos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Atom Empreendimentos
The main advantage of trading using opposite Citigroup and Atom Empreendimentos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Atom Empreendimentos 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 Atom Empreendimentos will offset losses from the drop in Atom Empreendimentos' long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
| Atom Empreendimentos vs. LPS Brasil | Atom Empreendimentos vs. PBG SA | Atom Empreendimentos vs. Springs Global Participaes | Atom Empreendimentos vs. Indstrias Romi SA |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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