Correlation Between Citigroup and Data Agro
Can any of the company-specific risk be diversified away by investing in both Citigroup and Data Agro 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 Data Agro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Data Agro, you can compare the effects of market volatilities on Citigroup and Data Agro 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 Data Agro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Data Agro.
Diversification Opportunities for Citigroup and Data Agro
Excellent diversification
The 3 months correlation between Citigroup and Data is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Data Agro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Data Agro 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 Data Agro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Data Agro has no effect on the direction of Citigroup i.e., Citigroup and Data Agro go up and down completely randomly.
Pair Corralation between Citigroup and Data Agro
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.02 times more return on investment than Data Agro. However, Citigroup is 1.02 times more volatile than Data Agro. It trades about 0.27 of its potential returns per unit of risk. Data Agro is currently generating about -0.26 per unit of risk. If you would invest 6,315 in Citigroup on September 2, 2024 and sell it today you would earn a total of 772.00 from holding Citigroup or generate 12.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Citigroup vs. Data Agro
Performance |
| Timeline |
| Citigroup |
| Data Agro |
Citigroup and Data Agro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Data Agro
The main advantage of trading using opposite Citigroup and Data Agro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Data Agro 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 Data Agro will offset losses from the drop in Data Agro's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Data Agro vs. Jubilee Life Insurance | Data Agro vs. Engro Polymer Chemicals | Data Agro vs. Ghani Chemical Industries | Data Agro vs. The Organic Meat |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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