Correlation Between Citigroup and Kinea II
Can any of the company-specific risk be diversified away by investing in both Citigroup and Kinea II 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 Kinea II into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Kinea II Real, you can compare the effects of market volatilities on Citigroup and Kinea II 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 Kinea II. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Kinea II.
Diversification Opportunities for Citigroup and Kinea II
Pay attention - limited upside
The 3 months correlation between Citigroup and Kinea is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Kinea II Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinea II Real 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 Kinea II. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinea II Real has no effect on the direction of Citigroup i.e., Citigroup and Kinea II go up and down completely randomly.
Pair Corralation between Citigroup and Kinea II
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.45 times more return on investment than Kinea II. However, Citigroup is 2.21 times less risky than Kinea II. It trades about 0.29 of its potential returns per unit of risk. Kinea II Real is currently generating about -0.07 per unit of risk. If you would invest 6,122 in Citigroup on August 26, 2024 and sell it today you would earn a total of 862.00 from holding Citigroup or generate 14.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Citigroup vs. Kinea II Real
Performance |
| Timeline |
| Citigroup |
| Kinea II Real |
Citigroup and Kinea II Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Kinea II
The main advantage of trading using opposite Citigroup and Kinea II positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Kinea II 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 Kinea II will offset losses from the drop in Kinea II's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| Kinea II vs. BTG Pactual Logstica | Kinea II vs. Plano Plano Desenvolvimento | Kinea II vs. Companhia Habitasul de | Kinea II vs. The Procter Gamble |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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