Correlation Between Citigroup and XL Axiata
Can any of the company-specific risk be diversified away by investing in both Citigroup and XL Axiata 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 XL Axiata into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and XL Axiata Tbk, you can compare the effects of market volatilities on Citigroup and XL Axiata 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 XL Axiata. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and XL Axiata.
Diversification Opportunities for Citigroup and XL Axiata
Pay attention - limited upside
The 3 months correlation between Citigroup and PTXKY is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and XL Axiata Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XL Axiata Tbk 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 XL Axiata. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XL Axiata Tbk has no effect on the direction of Citigroup i.e., Citigroup and XL Axiata go up and down completely randomly.
Pair Corralation between Citigroup and XL Axiata
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.44 times more return on investment than XL Axiata. However, Citigroup is 2.25 times less risky than XL Axiata. It trades about 0.21 of its potential returns per unit of risk. XL Axiata Tbk is currently generating about -0.05 per unit of risk. If you would invest 6,393 in Citigroup on August 31, 2024 and sell it today you would earn a total of 623.00 from holding Citigroup or generate 9.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. XL Axiata Tbk
Performance |
| Timeline |
| Citigroup |
| XL Axiata Tbk |
Citigroup and XL Axiata Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and XL Axiata
The main advantage of trading using opposite Citigroup and XL Axiata positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, XL Axiata 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 XL Axiata will offset losses from the drop in XL Axiata's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| XL Axiata vs. MTN Group Ltd | XL Axiata vs. Vodacom Group Ltd | XL Axiata vs. Telenor ASA ADR | XL Axiata vs. KT Corporation |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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