Correlation Between Citigroup and Millat Tractors
Can any of the company-specific risk be diversified away by investing in both Citigroup and Millat Tractors 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 Millat Tractors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Millat Tractors, you can compare the effects of market volatilities on Citigroup and Millat Tractors 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 Millat Tractors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Millat Tractors.
Diversification Opportunities for Citigroup and Millat Tractors
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citigroup and Millat is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Millat Tractors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Millat Tractors 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 Millat Tractors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Millat Tractors has no effect on the direction of Citigroup i.e., Citigroup and Millat Tractors go up and down completely randomly.
Pair Corralation between Citigroup and Millat Tractors
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.05 times more return on investment than Millat Tractors. However, Citigroup is 1.05 times more volatile than Millat Tractors. It trades about 0.08 of its potential returns per unit of risk. Millat Tractors is currently generating about -0.02 per unit of risk. If you would invest 5,992 in Citigroup on September 2, 2024 and sell it today you would earn a total of 1,095 from holding Citigroup or generate 18.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.62% |
| Values | Daily Returns |
Citigroup vs. Millat Tractors
Performance |
| Timeline |
| Citigroup |
| Millat Tractors |
Citigroup and Millat Tractors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Millat Tractors
The main advantage of trading using opposite Citigroup and Millat Tractors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Millat Tractors 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 Millat Tractors will offset losses from the drop in Millat Tractors' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Millat Tractors vs. Nimir Industrial Chemical | Millat Tractors vs. Century Insurance | Millat Tractors vs. Askari General Insurance | Millat Tractors vs. Habib Insurance |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |