Correlation Between Citigroup and Plaza Centers
Can any of the company-specific risk be diversified away by investing in both Citigroup and Plaza Centers 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 Plaza Centers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Plaza Centers NV, you can compare the effects of market volatilities on Citigroup and Plaza Centers 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 Plaza Centers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Plaza Centers.
Diversification Opportunities for Citigroup and Plaza Centers
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Plaza is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Plaza Centers NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plaza Centers NV 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 Plaza Centers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plaza Centers NV has no effect on the direction of Citigroup i.e., Citigroup and Plaza Centers go up and down completely randomly.
Pair Corralation between Citigroup and Plaza Centers
Taking into account the 90-day investment horizon Citigroup is expected to generate 3.16 times less return on investment than Plaza Centers. But when comparing it to its historical volatility, Citigroup is 5.33 times less risky than Plaza Centers. It trades about 0.08 of its potential returns per unit of risk. Plaza Centers NV is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 16,860 in Plaza Centers NV on August 29, 2024 and sell it today you would earn a total of 3,360 from holding Plaza Centers NV or generate 19.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 78.12% |
| Values | Daily Returns |
Citigroup vs. Plaza Centers NV
Performance |
| Timeline |
| Citigroup |
| Plaza Centers NV |
Citigroup and Plaza Centers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Plaza Centers
The main advantage of trading using opposite Citigroup and Plaza Centers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Plaza Centers 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 Plaza Centers will offset losses from the drop in Plaza Centers' long position.The idea behind Citigroup and Plaza Centers NV 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.| Plaza Centers vs. Ybox Real Estate | Plaza Centers vs. Brainsway | Plaza Centers vs. Mivne Real Estate | Plaza Centers vs. Photomyne |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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