Correlation Between Citigroup and Positivo Tecnologia
Can any of the company-specific risk be diversified away by investing in both Citigroup and Positivo Tecnologia 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 Positivo Tecnologia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Positivo Tecnologia SA, you can compare the effects of market volatilities on Citigroup and Positivo Tecnologia 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 Positivo Tecnologia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Positivo Tecnologia.
Diversification Opportunities for Citigroup and Positivo Tecnologia
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Positivo is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Positivo Tecnologia SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Positivo Tecnologia 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 Positivo Tecnologia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Positivo Tecnologia has no effect on the direction of Citigroup i.e., Citigroup and Positivo Tecnologia go up and down completely randomly.
Pair Corralation between Citigroup and Positivo Tecnologia
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.59 times more return on investment than Positivo Tecnologia. However, Citigroup is 1.68 times less risky than Positivo Tecnologia. It trades about 0.12 of its potential returns per unit of risk. Positivo Tecnologia SA is currently generating about -0.02 per unit of risk. If you would invest 3,936 in Citigroup on August 27, 2024 and sell it today you would earn a total of 3,048 from holding Citigroup or generate 77.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.68% |
| Values | Daily Returns |
Citigroup vs. Positivo Tecnologia SA
Performance |
| Timeline |
| Citigroup |
| Positivo Tecnologia |
Citigroup and Positivo Tecnologia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Positivo Tecnologia
The main advantage of trading using opposite Citigroup and Positivo Tecnologia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Positivo Tecnologia 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 Positivo Tecnologia will offset losses from the drop in Positivo Tecnologia's long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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