Correlation Between Citigroup and Univanich Palm
Can any of the company-specific risk be diversified away by investing in both Citigroup and Univanich Palm 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 Univanich Palm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Univanich Palm Oil, you can compare the effects of market volatilities on Citigroup and Univanich Palm 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 Univanich Palm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Univanich Palm.
Diversification Opportunities for Citigroup and Univanich Palm
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Univanich is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Univanich Palm Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Univanich Palm Oil 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 Univanich Palm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Univanich Palm Oil has no effect on the direction of Citigroup i.e., Citigroup and Univanich Palm go up and down completely randomly.
Pair Corralation between Citigroup and Univanich Palm
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.43 times more return on investment than Univanich Palm. However, Citigroup is 1.43 times more volatile than Univanich Palm Oil. It trades about 0.07 of its potential returns per unit of risk. Univanich Palm Oil is currently generating about 0.08 per unit of risk. If you would invest 4,145 in Citigroup on August 27, 2024 and sell it today you would earn a total of 2,839 from holding Citigroup or generate 68.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.18% |
| Values | Daily Returns |
Citigroup vs. Univanich Palm Oil
Performance |
| Timeline |
| Citigroup |
| Univanich Palm Oil |
Citigroup and Univanich Palm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Univanich Palm
The main advantage of trading using opposite Citigroup and Univanich Palm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Univanich Palm 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 Univanich Palm will offset losses from the drop in Univanich Palm's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| Univanich Palm vs. Chumporn Palm Oil | Univanich Palm vs. United Palm Oil | Univanich Palm vs. Thai Vegetable Oil | Univanich Palm vs. Sri Trang Agro Industry |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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