Correlation Between Citigroup and Komax Holding
Can any of the company-specific risk be diversified away by investing in both Citigroup and Komax Holding 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 Komax Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Komax Holding AG, you can compare the effects of market volatilities on Citigroup and Komax Holding 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 Komax Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Komax Holding.
Diversification Opportunities for Citigroup and Komax Holding
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and Komax is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Komax Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Komax Holding AG 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 Komax Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Komax Holding AG has no effect on the direction of Citigroup i.e., Citigroup and Komax Holding go up and down completely randomly.
Pair Corralation between Citigroup and Komax Holding
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.99 times more return on investment than Komax Holding. However, Citigroup is 1.01 times less risky than Komax Holding. It trades about 0.08 of its potential returns per unit of risk. Komax Holding AG is currently generating about -0.11 per unit of risk. If you would invest 4,544 in Citigroup on September 1, 2024 and sell it today you would earn a total of 2,543 from holding Citigroup or generate 55.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Citigroup vs. Komax Holding AG
Performance |
| Timeline |
| Citigroup |
| Komax Holding AG |
Citigroup and Komax Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Komax Holding
The main advantage of trading using opposite Citigroup and Komax Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Komax Holding 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 Komax Holding will offset losses from the drop in Komax Holding's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Komax Holding vs. Comet Holding AG | Komax Holding vs. Bossard Holding AG | Komax Holding vs. VAT Group AG | Komax Holding vs. Bucher Industries AG |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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