Correlation Between Citigroup and Petrovietnam Technical
Can any of the company-specific risk be diversified away by investing in both Citigroup and Petrovietnam Technical 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 Petrovietnam Technical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Petrovietnam Technical Services, you can compare the effects of market volatilities on Citigroup and Petrovietnam Technical 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 Petrovietnam Technical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Petrovietnam Technical.
Diversification Opportunities for Citigroup and Petrovietnam Technical
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Petrovietnam is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Petrovietnam Technical Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrovietnam Technical 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 Petrovietnam Technical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrovietnam Technical has no effect on the direction of Citigroup i.e., Citigroup and Petrovietnam Technical go up and down completely randomly.
Pair Corralation between Citigroup and Petrovietnam Technical
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.25 times more return on investment than Petrovietnam Technical. However, Citigroup is 1.25 times more volatile than Petrovietnam Technical Services. It trades about 0.41 of its potential returns per unit of risk. Petrovietnam Technical Services is currently generating about -0.08 per unit of risk. If you would invest 6,994 in Citigroup on November 3, 2024 and sell it today you would earn a total of 1,149 from holding Citigroup or generate 16.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 85.71% |
| Values | Daily Returns |
Citigroup vs. Petrovietnam Technical Service
Performance |
| Timeline |
| Citigroup |
| Petrovietnam Technical |
Citigroup and Petrovietnam Technical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Petrovietnam Technical
The main advantage of trading using opposite Citigroup and Petrovietnam Technical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Petrovietnam Technical 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 Petrovietnam Technical will offset losses from the drop in Petrovietnam Technical's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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