Correlation Between Citigroup and TELECOM ITALRISP
Can any of the company-specific risk be diversified away by investing in both Citigroup and TELECOM ITALRISP 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 TELECOM ITALRISP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and TELECOM ITALRISP ADR10, you can compare the effects of market volatilities on Citigroup and TELECOM ITALRISP 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 TELECOM ITALRISP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and TELECOM ITALRISP.
Diversification Opportunities for Citigroup and TELECOM ITALRISP
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and TELECOM is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and TELECOM ITALRISP ADR10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TELECOM ITALRISP ADR10 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 TELECOM ITALRISP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TELECOM ITALRISP ADR10 has no effect on the direction of Citigroup i.e., Citigroup and TELECOM ITALRISP go up and down completely randomly.
Pair Corralation between Citigroup and TELECOM ITALRISP
Taking into account the 90-day investment horizon Citigroup is expected to generate 4.03 times less return on investment than TELECOM ITALRISP. But when comparing it to its historical volatility, Citigroup is 1.78 times less risky than TELECOM ITALRISP. It trades about 0.04 of its potential returns per unit of risk. TELECOM ITALRISP ADR10 is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 262.00 in TELECOM ITALRISP ADR10 on October 11, 2024 and sell it today you would earn a total of 10.00 from holding TELECOM ITALRISP ADR10 or generate 3.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 85.71% |
| Values | Daily Returns |
Citigroup vs. TELECOM ITALRISP ADR10
Performance |
| Timeline |
| Citigroup |
| TELECOM ITALRISP ADR10 |
Citigroup and TELECOM ITALRISP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and TELECOM ITALRISP
The main advantage of trading using opposite Citigroup and TELECOM ITALRISP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, TELECOM ITALRISP 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 TELECOM ITALRISP will offset losses from the drop in TELECOM ITALRISP's long position.| Citigroup vs. Royal Bank of | Citigroup vs. JPMorgan Chase Co | Citigroup vs. Nu Holdings | Citigroup vs. Canadian Imperial Bank |
| TELECOM ITALRISP vs. Nippon Telegraph and | TELECOM ITALRISP vs. Superior Plus Corp | TELECOM ITALRISP vs. NMI Holdings | TELECOM ITALRISP vs. SIVERS SEMICONDUCTORS AB |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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