Correlation Between Citigroup and Globe Telecom
Can any of the company-specific risk be diversified away by investing in both Citigroup and Globe Telecom 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 Globe Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Globe Telecom, you can compare the effects of market volatilities on Citigroup and Globe Telecom 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 Globe Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Globe Telecom.
Diversification Opportunities for Citigroup and Globe Telecom
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Globe is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Globe Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globe Telecom 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 Globe Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globe Telecom has no effect on the direction of Citigroup i.e., Citigroup and Globe Telecom go up and down completely randomly.
Pair Corralation between Citigroup and Globe Telecom
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.18 times more return on investment than Globe Telecom. However, Citigroup is 1.18 times more volatile than Globe Telecom. It trades about 0.09 of its potential returns per unit of risk. Globe Telecom is currently generating about 0.06 per unit of risk. If you would invest 4,224 in Citigroup on August 26, 2024 and sell it today you would earn a total of 2,760 from holding Citigroup or generate 65.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.46% |
| Values | Daily Returns |
Citigroup vs. Globe Telecom
Performance |
| Timeline |
| Citigroup |
| Globe Telecom |
Citigroup and Globe Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Globe Telecom
The main advantage of trading using opposite Citigroup and Globe Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Globe Telecom 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 Globe Telecom will offset losses from the drop in Globe Telecom's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| Globe Telecom vs. PLDT Inc | Globe Telecom vs. Allhome Corp | Globe Telecom vs. Jollibee Foods Corp | Globe Telecom vs. LFM Properties Corp |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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