Correlation Between Citigroup and Tubos Reunidos
Can any of the company-specific risk be diversified away by investing in both Citigroup and Tubos Reunidos 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 Tubos Reunidos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Tubos Reunidos SA, you can compare the effects of market volatilities on Citigroup and Tubos Reunidos 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 Tubos Reunidos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Tubos Reunidos.
Diversification Opportunities for Citigroup and Tubos Reunidos
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Tubos is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Tubos Reunidos SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tubos Reunidos SA 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 Tubos Reunidos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tubos Reunidos SA has no effect on the direction of Citigroup i.e., Citigroup and Tubos Reunidos go up and down completely randomly.
Pair Corralation between Citigroup and Tubos Reunidos
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.93 times less return on investment than Tubos Reunidos. But when comparing it to its historical volatility, Citigroup is 3.78 times less risky than Tubos Reunidos. It trades about 0.27 of its potential returns per unit of risk. Tubos Reunidos SA is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 48.00 in Tubos Reunidos SA on September 14, 2024 and sell it today you would earn a total of 4.00 from holding Tubos Reunidos SA or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Citigroup vs. Tubos Reunidos SA
Performance |
| Timeline |
| Citigroup |
| Tubos Reunidos SA |
Citigroup and Tubos Reunidos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Tubos Reunidos
The main advantage of trading using opposite Citigroup and Tubos Reunidos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Tubos Reunidos 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 Tubos Reunidos will offset losses from the drop in Tubos Reunidos' long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
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 Correlations module to find global opportunities by holding instruments from different markets.
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