Correlation Between Citigroup and Cementos Pacasmayo
Can any of the company-specific risk be diversified away by investing in both Citigroup and Cementos Pacasmayo 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 Cementos Pacasmayo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Cementos Pacasmayo SAA, you can compare the effects of market volatilities on Citigroup and Cementos Pacasmayo 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 Cementos Pacasmayo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Cementos Pacasmayo.
Diversification Opportunities for Citigroup and Cementos Pacasmayo
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Cementos is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Cementos Pacasmayo SAA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cementos Pacasmayo SAA 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 Cementos Pacasmayo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cementos Pacasmayo SAA has no effect on the direction of Citigroup i.e., Citigroup and Cementos Pacasmayo go up and down completely randomly.
Pair Corralation between Citigroup and Cementos Pacasmayo
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.26 times less return on investment than Cementos Pacasmayo. In addition to that, Citigroup is 1.02 times more volatile than Cementos Pacasmayo SAA. It trades about 0.17 of its total potential returns per unit of risk. Cementos Pacasmayo SAA is currently generating about 0.22 per unit of volatility. If you would invest 590.00 in Cementos Pacasmayo SAA on August 23, 2024 and sell it today you would earn a total of 64.00 from holding Cementos Pacasmayo SAA or generate 10.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Cementos Pacasmayo SAA
Performance |
| Timeline |
| Citigroup |
| Cementos Pacasmayo SAA |
Citigroup and Cementos Pacasmayo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Cementos Pacasmayo
The main advantage of trading using opposite Citigroup and Cementos Pacasmayo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Cementos Pacasmayo 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 Cementos Pacasmayo will offset losses from the drop in Cementos Pacasmayo's long position.| Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Royal Bank of | Citigroup vs. JPMorgan Chase Co |
| Cementos Pacasmayo vs. Summit Materials | Cementos Pacasmayo vs. Eagle Materials | Cementos Pacasmayo vs. United States Lime | Cementos Pacasmayo vs. James Hardie Industries |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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