Correlation Between Citigroup and Solusi Sinergi
Can any of the company-specific risk be diversified away by investing in both Citigroup and Solusi Sinergi 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 Solusi Sinergi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Solusi Sinergi Digital, you can compare the effects of market volatilities on Citigroup and Solusi Sinergi 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 Solusi Sinergi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Solusi Sinergi.
Diversification Opportunities for Citigroup and Solusi Sinergi
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Solusi is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Solusi Sinergi Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solusi Sinergi Digital 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 Solusi Sinergi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solusi Sinergi Digital has no effect on the direction of Citigroup i.e., Citigroup and Solusi Sinergi go up and down completely randomly.
Pair Corralation between Citigroup and Solusi Sinergi
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.6 times less return on investment than Solusi Sinergi. But when comparing it to its historical volatility, Citigroup is 2.11 times less risky than Solusi Sinergi. It trades about 0.12 of its potential returns per unit of risk. Solusi Sinergi Digital is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 18,880 in Solusi Sinergi Digital on September 12, 2024 and sell it today you would earn a total of 22,920 from holding Solusi Sinergi Digital or generate 121.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 96.07% |
| Values | Daily Returns |
Citigroup vs. Solusi Sinergi Digital
Performance |
| Timeline |
| Citigroup |
| Solusi Sinergi Digital |
Citigroup and Solusi Sinergi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Solusi Sinergi
The main advantage of trading using opposite Citigroup and Solusi Sinergi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Solusi Sinergi 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 Solusi Sinergi will offset losses from the drop in Solusi Sinergi'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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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