Correlation Between Citigroup and Beta WIG20TR

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Can any of the company-specific risk be diversified away by investing in both Citigroup and Beta WIG20TR 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 Beta WIG20TR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Beta WIG20TR Portfelowy, you can compare the effects of market volatilities on Citigroup and Beta WIG20TR 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 Beta WIG20TR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Beta WIG20TR.

Diversification Opportunities for Citigroup and Beta WIG20TR

-0.59
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Citigroup and Beta is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Beta WIG20TR Portfelowy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beta WIG20TR Portfelowy 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 Beta WIG20TR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beta WIG20TR Portfelowy has no effect on the direction of Citigroup i.e., Citigroup and Beta WIG20TR go up and down completely randomly.

Pair Corralation between Citigroup and Beta WIG20TR

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.5 times more return on investment than Beta WIG20TR. However, Citigroup is 1.5 times more volatile than Beta WIG20TR Portfelowy. It trades about 0.26 of its potential returns per unit of risk. Beta WIG20TR Portfelowy is currently generating about -0.02 per unit of risk. If you would invest  6,361  in Citigroup on September 1, 2024 and sell it today you would earn a total of  726.00  from holding Citigroup or generate 11.41% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Citigroup  vs.  Beta WIG20TR Portfelowy

 Performance 
       Timeline  
Citigroup 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.
Beta WIG20TR Portfelowy 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Beta WIG20TR Portfelowy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Etf's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

Citigroup and Beta WIG20TR Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Citigroup and Beta WIG20TR

The main advantage of trading using opposite Citigroup and Beta WIG20TR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Beta WIG20TR 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 Beta WIG20TR will offset losses from the drop in Beta WIG20TR's long position.
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The idea behind Citigroup and Beta WIG20TR Portfelowy 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.
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.

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