Correlation Between Citigroup and Bhakti Multi
Can any of the company-specific risk be diversified away by investing in both Citigroup and Bhakti Multi 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 Bhakti Multi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Bhakti Multi Artha, you can compare the effects of market volatilities on Citigroup and Bhakti Multi 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 Bhakti Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Bhakti Multi.
Diversification Opportunities for Citigroup and Bhakti Multi
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Bhakti is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Bhakti Multi Artha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bhakti Multi Artha 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 Bhakti Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bhakti Multi Artha has no effect on the direction of Citigroup i.e., Citigroup and Bhakti Multi go up and down completely randomly.
Pair Corralation between Citigroup and Bhakti Multi
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.71 times more return on investment than Bhakti Multi. However, Citigroup is 1.41 times less risky than Bhakti Multi. It trades about 0.08 of its potential returns per unit of risk. Bhakti Multi Artha is currently generating about -0.04 per unit of risk. If you would invest 4,544 in Citigroup on September 1, 2024 and sell it today you would earn a total of 2,543 from holding Citigroup or generate 55.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.97% |
| Values | Daily Returns |
Citigroup vs. Bhakti Multi Artha
Performance |
| Timeline |
| Citigroup |
| Bhakti Multi Artha |
Citigroup and Bhakti Multi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Bhakti Multi
The main advantage of trading using opposite Citigroup and Bhakti Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Bhakti Multi 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 Bhakti Multi will offset losses from the drop in Bhakti Multi's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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