Correlation Between Citigroup and Prima Andalan
Can any of the company-specific risk be diversified away by investing in both Citigroup and Prima Andalan 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 Prima Andalan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Prima Andalan Mandiri, you can compare the effects of market volatilities on Citigroup and Prima Andalan 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 Prima Andalan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Prima Andalan.
Diversification Opportunities for Citigroup and Prima Andalan
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Prima is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Prima Andalan Mandiri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prima Andalan Mandiri 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 Prima Andalan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prima Andalan Mandiri has no effect on the direction of Citigroup i.e., Citigroup and Prima Andalan go up and down completely randomly.
Pair Corralation between Citigroup and Prima Andalan
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.96 times more return on investment than Prima Andalan. However, Citigroup is 2.96 times more volatile than Prima Andalan Mandiri. It trades about 0.21 of its potential returns per unit of risk. Prima Andalan Mandiri is currently generating about -0.21 per unit of risk. If you would invest 6,412 in Citigroup on August 30, 2024 and sell it today you would earn a total of 604.00 from holding Citigroup or generate 9.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Prima Andalan Mandiri
Performance |
| Timeline |
| Citigroup |
| Prima Andalan Mandiri |
Citigroup and Prima Andalan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Prima Andalan
The main advantage of trading using opposite Citigroup and Prima Andalan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Prima Andalan 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 Prima Andalan will offset losses from the drop in Prima Andalan's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Prima Andalan vs. Baramulti Suksessarana Tbk | Prima Andalan vs. Mitrabara Adiperdana PT | Prima Andalan vs. Adaro Minerals Indonesia | Prima Andalan vs. RMK Energy PT |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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