Correlation Between Citigroup and Temapol Polimer
Can any of the company-specific risk be diversified away by investing in both Citigroup and Temapol Polimer 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 Temapol Polimer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Temapol Polimer Plastik, you can compare the effects of market volatilities on Citigroup and Temapol Polimer 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 Temapol Polimer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Temapol Polimer.
Diversification Opportunities for Citigroup and Temapol Polimer
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Citigroup and Temapol is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Temapol Polimer Plastik in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Temapol Polimer Plastik 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 Temapol Polimer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Temapol Polimer Plastik has no effect on the direction of Citigroup i.e., Citigroup and Temapol Polimer go up and down completely randomly.
Pair Corralation between Citigroup and Temapol Polimer
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.47 times more return on investment than Temapol Polimer. However, Citigroup is 2.15 times less risky than Temapol Polimer. It trades about 0.18 of its potential returns per unit of risk. Temapol Polimer Plastik is currently generating about 0.06 per unit of risk. If you would invest 6,980 in Citigroup on September 12, 2024 and sell it today you would earn a total of 224.00 from holding Citigroup or generate 3.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Citigroup vs. Temapol Polimer Plastik
Performance |
| Timeline |
| Citigroup |
| Temapol Polimer Plastik |
Citigroup and Temapol Polimer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Temapol Polimer
The main advantage of trading using opposite Citigroup and Temapol Polimer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Temapol Polimer 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 Temapol Polimer will offset losses from the drop in Temapol Polimer'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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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