Correlation Between Citigroup and Westwing Comrcio
Can any of the company-specific risk be diversified away by investing in both Citigroup and Westwing Comrcio 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 Westwing Comrcio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Westwing Comrcio Varejista, you can compare the effects of market volatilities on Citigroup and Westwing Comrcio 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 Westwing Comrcio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Westwing Comrcio.
Diversification Opportunities for Citigroup and Westwing Comrcio
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and Westwing is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Westwing Comrcio Varejista in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westwing Comrcio Var 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 Westwing Comrcio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westwing Comrcio Var has no effect on the direction of Citigroup i.e., Citigroup and Westwing Comrcio go up and down completely randomly.
Pair Corralation between Citigroup and Westwing Comrcio
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.39 times more return on investment than Westwing Comrcio. However, Citigroup is 2.57 times less risky than Westwing Comrcio. It trades about 0.09 of its potential returns per unit of risk. Westwing Comrcio Varejista is currently generating about -0.03 per unit of risk. If you would invest 4,479 in Citigroup on September 12, 2024 and sell it today you would earn a total of 2,771 from holding Citigroup or generate 61.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.94% |
| Values | Daily Returns |
Citigroup vs. Westwing Comrcio Varejista
Performance |
| Timeline |
| Citigroup |
| Westwing Comrcio Var |
Citigroup and Westwing Comrcio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Westwing Comrcio
The main advantage of trading using opposite Citigroup and Westwing Comrcio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Westwing Comrcio 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 Westwing Comrcio will offset losses from the drop in Westwing Comrcio'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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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