Correlation Between Citigroup and Martin Currie
Can any of the company-specific risk be diversified away by investing in both Citigroup and Martin Currie 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 Martin Currie into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Martin Currie Sustainable, you can compare the effects of market volatilities on Citigroup and Martin Currie 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 Martin Currie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Martin Currie.
Diversification Opportunities for Citigroup and Martin Currie
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Martin is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Martin Currie Sustainable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Martin Currie Sustainable 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 Martin Currie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Martin Currie Sustainable has no effect on the direction of Citigroup i.e., Citigroup and Martin Currie go up and down completely randomly.
Pair Corralation between Citigroup and Martin Currie
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.38 times more return on investment than Martin Currie. However, Citigroup is 1.38 times more volatile than Martin Currie Sustainable. It trades about 0.07 of its potential returns per unit of risk. Martin Currie Sustainable is currently generating about 0.01 per unit of risk. If you would invest 4,134 in Citigroup on August 30, 2024 and sell it today you would earn a total of 2,882 from holding Citigroup or generate 69.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Martin Currie Sustainable
Performance |
| Timeline |
| Citigroup |
| Martin Currie Sustainable |
Citigroup and Martin Currie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Martin Currie
The main advantage of trading using opposite Citigroup and Martin Currie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Martin Currie 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 Martin Currie will offset losses from the drop in Martin Currie's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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