Correlation Between Citigroup and HEDGE Brasil
Can any of the company-specific risk be diversified away by investing in both Citigroup and HEDGE Brasil 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 HEDGE Brasil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and HEDGE Brasil Shopping, you can compare the effects of market volatilities on Citigroup and HEDGE Brasil 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 HEDGE Brasil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and HEDGE Brasil.
Diversification Opportunities for Citigroup and HEDGE Brasil
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and HEDGE is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and HEDGE Brasil Shopping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEDGE Brasil Shopping 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 HEDGE Brasil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEDGE Brasil Shopping has no effect on the direction of Citigroup i.e., Citigroup and HEDGE Brasil go up and down completely randomly.
Pair Corralation between Citigroup and HEDGE Brasil
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.36 times more return on investment than HEDGE Brasil. However, Citigroup is 2.36 times more volatile than HEDGE Brasil Shopping. It trades about 0.07 of its potential returns per unit of risk. HEDGE Brasil Shopping is currently generating about 0.05 per unit of risk. If you would invest 4,381 in Citigroup on August 31, 2024 and sell it today you would earn a total of 2,706 from holding Citigroup or generate 61.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Citigroup vs. HEDGE Brasil Shopping
Performance |
| Timeline |
| Citigroup |
| HEDGE Brasil Shopping |
Citigroup and HEDGE Brasil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and HEDGE Brasil
The main advantage of trading using opposite Citigroup and HEDGE Brasil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, HEDGE Brasil 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 HEDGE Brasil will offset losses from the drop in HEDGE Brasil's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| HEDGE Brasil vs. HEDGE OFFICE INCOME | HEDGE Brasil vs. Real Estate Investment | HEDGE Brasil vs. NAVI CRDITO IMOBILIRIO | HEDGE Brasil vs. LIFE CAPITAL PARTNERS |
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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