Correlation Between Citigroup and Multi Medika
Can any of the company-specific risk be diversified away by investing in both Citigroup and Multi Medika 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 Multi Medika into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Multi Medika Internasional, you can compare the effects of market volatilities on Citigroup and Multi Medika 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 Multi Medika. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Multi Medika.
Diversification Opportunities for Citigroup and Multi Medika
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citigroup and Multi is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Multi Medika Internasional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Medika Interna 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 Multi Medika. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Medika Interna has no effect on the direction of Citigroup i.e., Citigroup and Multi Medika go up and down completely randomly.
Pair Corralation between Citigroup and Multi Medika
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.46 times more return on investment than Multi Medika. However, Citigroup is 2.16 times less risky than Multi Medika. It trades about 0.23 of its potential returns per unit of risk. Multi Medika Internasional is currently generating about 0.09 per unit of risk. If you would invest 6,360 in Citigroup on August 27, 2024 and sell it today you would earn a total of 624.00 from holding Citigroup or generate 9.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Multi Medika Internasional
Performance |
| Timeline |
| Citigroup |
| Multi Medika Interna |
Citigroup and Multi Medika Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Multi Medika
The main advantage of trading using opposite Citigroup and Multi Medika positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Multi Medika 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 Multi Medika will offset losses from the drop in Multi Medika's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| Multi Medika vs. Bakrie Brothers Tbk | Multi Medika vs. Langgeng Makmur Industri | Multi Medika vs. Petrosea Tbk | Multi Medika vs. Graha Layar Prima |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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