Correlation Between Citigroup and Mota Engil
Can any of the company-specific risk be diversified away by investing in both Citigroup and Mota Engil 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 Mota Engil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Mota Engil SGPS SA, you can compare the effects of market volatilities on Citigroup and Mota Engil 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 Mota Engil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Mota Engil.
Diversification Opportunities for Citigroup and Mota Engil
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Citigroup and Mota is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Mota Engil SGPS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mota Engil SGPS 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 Mota Engil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mota Engil SGPS has no effect on the direction of Citigroup i.e., Citigroup and Mota Engil go up and down completely randomly.
Pair Corralation between Citigroup and Mota Engil
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.89 times more return on investment than Mota Engil. However, Citigroup is 1.12 times less risky than Mota Engil. It trades about 0.21 of its potential returns per unit of risk. Mota Engil SGPS SA is currently generating about 0.06 per unit of risk. If you would invest 6,360 in Citigroup on August 29, 2024 and sell it today you would earn a total of 615.00 from holding Citigroup or generate 9.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Mota Engil SGPS SA
Performance |
| Timeline |
| Citigroup |
| Mota Engil SGPS |
Citigroup and Mota Engil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Mota Engil
The main advantage of trading using opposite Citigroup and Mota Engil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Mota Engil 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 Mota Engil will offset losses from the drop in Mota Engil's long position.The idea behind Citigroup and Mota Engil SGPS SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Mota Engil vs. Sonae SGPS SA | Mota Engil vs. Altri SGPS SA | Mota Engil vs. Banco Comercial Portugues | Mota Engil vs. Semapa |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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