Correlation Between Citigroup and Fibra Mty
Can any of the company-specific risk be diversified away by investing in both Citigroup and Fibra Mty 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 Fibra Mty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Fibra Mty SAPI, you can compare the effects of market volatilities on Citigroup and Fibra Mty 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 Fibra Mty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Fibra Mty.
Diversification Opportunities for Citigroup and Fibra Mty
Good diversification
The 3 months correlation between Citigroup and Fibra is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Fibra Mty SAPI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fibra Mty SAPI 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 Fibra Mty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fibra Mty SAPI has no effect on the direction of Citigroup i.e., Citigroup and Fibra Mty go up and down completely randomly.
Pair Corralation between Citigroup and Fibra Mty
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.46 times more return on investment than Fibra Mty. However, Citigroup is 2.46 times more volatile than Fibra Mty SAPI. It trades about 0.23 of its potential returns per unit of risk. Fibra Mty SAPI is currently generating about -0.11 per unit of risk. If you would invest 6,393 in Citigroup on August 31, 2024 and sell it today you would earn a total of 694.00 from holding Citigroup or generate 10.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Citigroup vs. Fibra Mty SAPI
Performance |
| Timeline |
| Citigroup |
| Fibra Mty SAPI |
Citigroup and Fibra Mty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Fibra Mty
The main advantage of trading using opposite Citigroup and Fibra Mty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Fibra Mty 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 Fibra Mty will offset losses from the drop in Fibra Mty's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Fibra Mty vs. Samsung Electronics Co | Fibra Mty vs. Deutsche Bank Aktiengesellschaft | Fibra Mty vs. First Republic Bank | Fibra Mty vs. New Oriental Education |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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