Correlation Between Citigroup and KGHM Polska
Can any of the company-specific risk be diversified away by investing in both Citigroup and KGHM Polska 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 KGHM Polska into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and KGHM Polska Miedz, you can compare the effects of market volatilities on Citigroup and KGHM Polska 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 KGHM Polska. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and KGHM Polska.
Diversification Opportunities for Citigroup and KGHM Polska
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Citigroup and KGHM is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and KGHM Polska Miedz in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KGHM Polska Miedz 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 KGHM Polska. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KGHM Polska Miedz has no effect on the direction of Citigroup i.e., Citigroup and KGHM Polska go up and down completely randomly.
Pair Corralation between Citigroup and KGHM Polska
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.83 times more return on investment than KGHM Polska. However, Citigroup is 1.2 times less risky than KGHM Polska. It trades about 0.18 of its potential returns per unit of risk. KGHM Polska Miedz is currently generating about -0.16 per unit of risk. If you would invest 5,985 in Citigroup on August 26, 2024 and sell it today you would earn a total of 999.00 from holding Citigroup or generate 16.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Citigroup vs. KGHM Polska Miedz
Performance |
| Timeline |
| Citigroup |
| KGHM Polska Miedz |
Citigroup and KGHM Polska Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and KGHM Polska
The main advantage of trading using opposite Citigroup and KGHM Polska positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, KGHM Polska 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 KGHM Polska will offset losses from the drop in KGHM Polska's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
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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 Stocks Directory module to find actively traded stocks across global markets.
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