Correlation Between Citigroup and Ace Oldfields
Can any of the company-specific risk be diversified away by investing in both Citigroup and Ace Oldfields 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 Ace Oldfields into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Ace Oldfields PT, you can compare the effects of market volatilities on Citigroup and Ace Oldfields 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 Ace Oldfields. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Ace Oldfields.
Diversification Opportunities for Citigroup and Ace Oldfields
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citigroup and Ace is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Ace Oldfields PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ace Oldfields PT 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 Ace Oldfields. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ace Oldfields PT has no effect on the direction of Citigroup i.e., Citigroup and Ace Oldfields go up and down completely randomly.
Pair Corralation between Citigroup and Ace Oldfields
Taking into account the 90-day investment horizon Citigroup is expected to under-perform the Ace Oldfields. In addition to that, Citigroup is 4.4 times more volatile than Ace Oldfields PT. It trades about -0.1 of its total potential returns per unit of risk. Ace Oldfields PT is currently generating about 0.15 per unit of volatility. If you would invest 5,000 in Ace Oldfields PT on January 13, 2025 and sell it today you would earn a total of 100.00 from holding Ace Oldfields PT or generate 2.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 68.18% |
| Values | Daily Returns |
Citigroup vs. Ace Oldfields PT
Performance |
| Timeline |
| Citigroup |
| Ace Oldfields PT |
Citigroup and Ace Oldfields Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Ace Oldfields
The main advantage of trading using opposite Citigroup and Ace Oldfields positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Ace Oldfields 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 Ace Oldfields will offset losses from the drop in Ace Oldfields' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Ace Oldfields vs. Ladangbaja Murni PT | Ace Oldfields vs. PT Hasnur Internasional | Ace Oldfields vs. Geoprima Solusi Tbk | Ace Oldfields vs. Prima Andalan Mandiri |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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