Correlation Between Citigroup and Platinum Asia
Can any of the company-specific risk be diversified away by investing in both Citigroup and Platinum Asia 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 Platinum Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Platinum Asia Investments, you can compare the effects of market volatilities on Citigroup and Platinum Asia 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 Platinum Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Platinum Asia.
Diversification Opportunities for Citigroup and Platinum Asia
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Citigroup and Platinum is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Platinum Asia Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum Asia Investments 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 Platinum Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Platinum Asia Investments has no effect on the direction of Citigroup i.e., Citigroup and Platinum Asia go up and down completely randomly.
Pair Corralation between Citigroup and Platinum Asia
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.51 times more return on investment than Platinum Asia. However, Citigroup is 1.51 times more volatile than Platinum Asia Investments. It trades about 0.26 of its potential returns per unit of risk. Platinum Asia Investments is currently generating about -0.22 per unit of risk. If you would invest 6,361 in Citigroup on September 1, 2024 and sell it today you would earn a total of 726.00 from holding Citigroup or generate 11.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Citigroup vs. Platinum Asia Investments
Performance |
| Timeline |
| Citigroup |
| Platinum Asia Investments |
Citigroup and Platinum Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Platinum Asia
The main advantage of trading using opposite Citigroup and Platinum Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Platinum Asia 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 Platinum Asia will offset losses from the drop in Platinum Asia's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Platinum Asia vs. Navigator Global Investments | Platinum Asia vs. Diversified United Investment | Platinum Asia vs. Garda Diversified Ppty | Platinum Asia vs. Argo Investments |
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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