Correlation Between Citigroup and Indospring Tbk
Can any of the company-specific risk be diversified away by investing in both Citigroup and Indospring Tbk 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 Indospring Tbk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Indospring Tbk, you can compare the effects of market volatilities on Citigroup and Indospring Tbk 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 Indospring Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Indospring Tbk.
Diversification Opportunities for Citigroup and Indospring Tbk
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Indospring is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Indospring Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indospring Tbk 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 Indospring Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indospring Tbk has no effect on the direction of Citigroup i.e., Citigroup and Indospring Tbk go up and down completely randomly.
Pair Corralation between Citigroup and Indospring Tbk
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.6 times more return on investment than Indospring Tbk. However, Citigroup is 1.66 times less risky than Indospring Tbk. It trades about 0.13 of its potential returns per unit of risk. Indospring Tbk is currently generating about 0.01 per unit of risk. If you would invest 4,053 in Citigroup on September 1, 2024 and sell it today you would earn a total of 3,034 from holding Citigroup or generate 74.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.17% |
| Values | Daily Returns |
Citigroup vs. Indospring Tbk
Performance |
| Timeline |
| Citigroup |
| Indospring Tbk |
Citigroup and Indospring Tbk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Indospring Tbk
The main advantage of trading using opposite Citigroup and Indospring Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Indospring Tbk 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 Indospring Tbk will offset losses from the drop in Indospring Tbk's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Indospring Tbk vs. Japfa Comfeed Indonesia | Indospring Tbk vs. Charoen Pokphand Indonesia | Indospring Tbk vs. Erajaya Swasembada Tbk | Indospring Tbk vs. Indofood Cbp Sukses |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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