Correlation Between Citigroup and Gujarat Ambuja
Can any of the company-specific risk be diversified away by investing in both Citigroup and Gujarat Ambuja 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 Gujarat Ambuja into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Gujarat Ambuja Exports, you can compare the effects of market volatilities on Citigroup and Gujarat Ambuja 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 Gujarat Ambuja. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Gujarat Ambuja.
Diversification Opportunities for Citigroup and Gujarat Ambuja
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Gujarat is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Gujarat Ambuja Exports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gujarat Ambuja Exports 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 Gujarat Ambuja. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gujarat Ambuja Exports has no effect on the direction of Citigroup i.e., Citigroup and Gujarat Ambuja go up and down completely randomly.
Pair Corralation between Citigroup and Gujarat Ambuja
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.54 times less return on investment than Gujarat Ambuja. But when comparing it to its historical volatility, Citigroup is 2.57 times less risky than Gujarat Ambuja. It trades about 0.23 of its potential returns per unit of risk. Gujarat Ambuja Exports is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 12,719 in Gujarat Ambuja Exports on September 13, 2024 and sell it today you would earn a total of 1,208 from holding Gujarat Ambuja Exports or generate 9.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Citigroup vs. Gujarat Ambuja Exports
Performance |
| Timeline |
| Citigroup |
| Gujarat Ambuja Exports |
Citigroup and Gujarat Ambuja Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Gujarat Ambuja
The main advantage of trading using opposite Citigroup and Gujarat Ambuja positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Gujarat Ambuja 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 Gujarat Ambuja will offset losses from the drop in Gujarat Ambuja's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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