Correlation Between Citigroup and Grupo Nacional
Can any of the company-specific risk be diversified away by investing in both Citigroup and Grupo Nacional 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 Grupo Nacional into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Grupo Nacional Provincial, you can compare the effects of market volatilities on Citigroup and Grupo Nacional 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 Grupo Nacional. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Grupo Nacional.
Diversification Opportunities for Citigroup and Grupo Nacional
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Grupo is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Grupo Nacional Provincial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Nacional Provincial 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 Grupo Nacional. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Nacional Provincial has no effect on the direction of Citigroup i.e., Citigroup and Grupo Nacional go up and down completely randomly.
Pair Corralation between Citigroup and Grupo Nacional
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.77 times more return on investment than Grupo Nacional. However, Citigroup is 1.3 times less risky than Grupo Nacional. It trades about 0.13 of its potential returns per unit of risk. Grupo Nacional Provincial is currently generating about -0.13 per unit of risk. If you would invest 6,092 in Citigroup on September 3, 2024 and sell it today you would earn a total of 995.00 from holding Citigroup or generate 16.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.31% |
| Values | Daily Returns |
Citigroup vs. Grupo Nacional Provincial
Performance |
| Timeline |
| Citigroup |
| Grupo Nacional Provincial |
Citigroup and Grupo Nacional Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Grupo Nacional
The main advantage of trading using opposite Citigroup and Grupo Nacional positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Grupo Nacional 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 Grupo Nacional will offset losses from the drop in Grupo Nacional's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Grupo Nacional vs. Samsung Electronics Co | Grupo Nacional vs. Taiwan Semiconductor Manufacturing | Grupo Nacional vs. JPMorgan Chase Co | Grupo Nacional vs. Bank of America |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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