Correlation Between Citigroup and Companhia Energtica
Can any of the company-specific risk be diversified away by investing in both Citigroup and Companhia Energtica 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 Companhia Energtica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Companhia Energtica de, you can compare the effects of market volatilities on Citigroup and Companhia Energtica 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 Companhia Energtica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Companhia Energtica.
Diversification Opportunities for Citigroup and Companhia Energtica
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Citigroup and Companhia is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Companhia Energtica de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Companhia Energtica 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 Companhia Energtica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Companhia Energtica has no effect on the direction of Citigroup i.e., Citigroup and Companhia Energtica go up and down completely randomly.
Pair Corralation between Citigroup and Companhia Energtica
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.73 times more return on investment than Companhia Energtica. However, Citigroup is 1.36 times less risky than Companhia Energtica. It trades about 0.08 of its potential returns per unit of risk. Companhia Energtica de is currently generating about 0.06 per unit of risk. If you would invest 4,525 in Citigroup on August 31, 2024 and sell it today you would earn a total of 2,562 from holding Citigroup or generate 56.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.93% |
| Values | Daily Returns |
Citigroup vs. Companhia Energtica de
Performance |
| Timeline |
| Citigroup |
| Companhia Energtica |
Citigroup and Companhia Energtica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Companhia Energtica
The main advantage of trading using opposite Citigroup and Companhia Energtica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Companhia Energtica 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 Companhia Energtica will offset losses from the drop in Companhia Energtica's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Companhia Energtica vs. Companhia Energtica de | Companhia Energtica vs. Companhia Energtica de | Companhia Energtica vs. Empresa Metropolitana de | Companhia Energtica vs. Companhiade Eletricidade do |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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