Correlation Between Citigroup and Flexopack Socit
Can any of the company-specific risk be diversified away by investing in both Citigroup and Flexopack Socit 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 Flexopack Socit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Flexopack Socit Anonyme, you can compare the effects of market volatilities on Citigroup and Flexopack Socit 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 Flexopack Socit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Flexopack Socit.
Diversification Opportunities for Citigroup and Flexopack Socit
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Citigroup and Flexopack is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Flexopack Socit Anonyme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flexopack Socit Anonyme 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 Flexopack Socit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flexopack Socit Anonyme has no effect on the direction of Citigroup i.e., Citigroup and Flexopack Socit go up and down completely randomly.
Pair Corralation between Citigroup and Flexopack Socit
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.66 times more return on investment than Flexopack Socit. However, Citigroup is 1.5 times less risky than Flexopack Socit. It trades about 0.11 of its potential returns per unit of risk. Flexopack Socit Anonyme is currently generating about 0.03 per unit of risk. If you would invest 6,104 in Citigroup on August 28, 2024 and sell it today you would earn a total of 871.00 from holding Citigroup or generate 14.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Flexopack Socit Anonyme
Performance |
| Timeline |
| Citigroup |
| Flexopack Socit Anonyme |
Citigroup and Flexopack Socit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Flexopack Socit
The main advantage of trading using opposite Citigroup and Flexopack Socit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Flexopack Socit 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 Flexopack Socit will offset losses from the drop in Flexopack Socit's long position.The idea behind Citigroup and Flexopack Socit Anonyme 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.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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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