Correlation Between Citigroup and Renta 4
Can any of the company-specific risk be diversified away by investing in both Citigroup and Renta 4 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 Renta 4 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Renta 4 Banco, you can compare the effects of market volatilities on Citigroup and Renta 4 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 Renta 4. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Renta 4.
Diversification Opportunities for Citigroup and Renta 4
Very poor diversification
The 3 months correlation between Citigroup and Renta is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Renta 4 Banco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Renta 4 Banco 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 Renta 4. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Renta 4 Banco has no effect on the direction of Citigroup i.e., Citigroup and Renta 4 go up and down completely randomly.
Pair Corralation between Citigroup and Renta 4
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.02 times less return on investment than Renta 4. In addition to that, Citigroup is 1.04 times more volatile than Renta 4 Banco. It trades about 0.23 of its total potential returns per unit of risk. Renta 4 Banco is currently generating about 0.24 per unit of volatility. If you would invest 1,172 in Renta 4 Banco on August 27, 2024 and sell it today you would earn a total of 118.00 from holding Renta 4 Banco or generate 10.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Renta 4 Banco
Performance |
| Timeline |
| Citigroup |
| Renta 4 Banco |
Citigroup and Renta 4 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Renta 4
The main advantage of trading using opposite Citigroup and Renta 4 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Renta 4 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 Renta 4 will offset losses from the drop in Renta 4's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| Renta 4 vs. Grupo Catalana Occidente | Renta 4 vs. Miquel y Costas | Renta 4 vs. Faes Farma SA | Renta 4 vs. Azkoyen |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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