Correlation Between Citigroup and PV2 Investment
Can any of the company-specific risk be diversified away by investing in both Citigroup and PV2 Investment 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 PV2 Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and PV2 Investment JSC, you can compare the effects of market volatilities on Citigroup and PV2 Investment 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 PV2 Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and PV2 Investment.
Diversification Opportunities for Citigroup and PV2 Investment
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Citigroup and PV2 is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and PV2 Investment JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PV2 Investment JSC 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 PV2 Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PV2 Investment JSC has no effect on the direction of Citigroup i.e., Citigroup and PV2 Investment go up and down completely randomly.
Pair Corralation between Citigroup and PV2 Investment
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.56 times more return on investment than PV2 Investment. However, Citigroup is 1.79 times less risky than PV2 Investment. It trades about 0.21 of its potential returns per unit of risk. PV2 Investment JSC is currently generating about 0.02 per unit of risk. If you would invest 6,360 in Citigroup on August 29, 2024 and sell it today you would earn a total of 615.00 from holding Citigroup or generate 9.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. PV2 Investment JSC
Performance |
| Timeline |
| Citigroup |
| PV2 Investment JSC |
Citigroup and PV2 Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and PV2 Investment
The main advantage of trading using opposite Citigroup and PV2 Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, PV2 Investment 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 PV2 Investment will offset losses from the drop in PV2 Investment's long position.The idea behind Citigroup and PV2 Investment JSC 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.| PV2 Investment vs. Pha Lai Thermal | PV2 Investment vs. Techno Agricultural Supplying | PV2 Investment vs. Telecoms Informatics JSC | PV2 Investment vs. Elcom Technology Communications |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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