Correlation Between Citigroup and PT United
Can any of the company-specific risk be diversified away by investing in both Citigroup and PT United 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 PT United into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and PT United Tractors, you can compare the effects of market volatilities on Citigroup and PT United 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 PT United. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and PT United.
Diversification Opportunities for Citigroup and PT United
Weak diversification
The 3 months correlation between Citigroup and UTY is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and PT United Tractors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT United Tractors 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 PT United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT United Tractors has no effect on the direction of Citigroup i.e., Citigroup and PT United go up and down completely randomly.
Pair Corralation between Citigroup and PT United
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.75 times less return on investment than PT United. But when comparing it to its historical volatility, Citigroup is 2.04 times less risky than PT United. It trades about 0.1 of its potential returns per unit of risk. PT United Tractors is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 114.00 in PT United Tractors on September 12, 2024 and sell it today you would earn a total of 46.00 from holding PT United Tractors or generate 40.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.88% |
| Values | Daily Returns |
Citigroup vs. PT United Tractors
Performance |
| Timeline |
| Citigroup |
| PT United Tractors |
Citigroup and PT United Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and PT United
The main advantage of trading using opposite Citigroup and PT United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, PT United 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 PT United will offset losses from the drop in PT United's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| PT United vs. MACOM Technology Solutions | PT United vs. Computer And Technologies | PT United vs. SMA Solar Technology | PT United vs. DXC Technology Co |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |