Correlation Between Citigroup and Holding Burstil
Can any of the company-specific risk be diversified away by investing in both Citigroup and Holding Burstil 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 Holding Burstil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Holding Burstil Regional, you can compare the effects of market volatilities on Citigroup and Holding Burstil 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 Holding Burstil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Holding Burstil.
Diversification Opportunities for Citigroup and Holding Burstil
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Holding is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Holding Burstil Regional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holding Burstil Regional 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 Holding Burstil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Holding Burstil Regional has no effect on the direction of Citigroup i.e., Citigroup and Holding Burstil go up and down completely randomly.
Pair Corralation between Citigroup and Holding Burstil
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.3 times more return on investment than Holding Burstil. However, Citigroup is 2.3 times more volatile than Holding Burstil Regional. It trades about 0.09 of its potential returns per unit of risk. Holding Burstil Regional is currently generating about 0.0 per unit of risk. If you would invest 5,896 in Citigroup on September 14, 2024 and sell it today you would earn a total of 1,224 from holding Citigroup or generate 20.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Citigroup vs. Holding Burstil Regional
Performance |
| Timeline |
| Citigroup |
| Holding Burstil Regional |
Citigroup and Holding Burstil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Holding Burstil
The main advantage of trading using opposite Citigroup and Holding Burstil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Holding Burstil 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 Holding Burstil will offset losses from the drop in Holding Burstil's long position.The idea behind Citigroup and Holding Burstil Regional pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Holding Burstil vs. Aguas Andinas SA | Holding Burstil vs. Parq Arauco | Holding Burstil vs. Enel Generacin Chile | Holding Burstil vs. Sociedad Matriz SAAM |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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