Correlation Between Citigroup and XP Infra
Can any of the company-specific risk be diversified away by investing in both Citigroup and XP Infra 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 XP Infra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and XP Infra Fund, you can compare the effects of market volatilities on Citigroup and XP Infra 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 XP Infra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and XP Infra.
Diversification Opportunities for Citigroup and XP Infra
Pay attention - limited upside
The 3 months correlation between Citigroup and XPIE11 is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and XP Infra Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XP Infra Fund 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 XP Infra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XP Infra Fund has no effect on the direction of Citigroup i.e., Citigroup and XP Infra go up and down completely randomly.
Pair Corralation between Citigroup and XP Infra
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.84 times more return on investment than XP Infra. However, Citigroup is 1.84 times more volatile than XP Infra Fund. It trades about 0.08 of its potential returns per unit of risk. XP Infra Fund is currently generating about -0.01 per unit of risk. If you would invest 4,362 in Citigroup on August 30, 2024 and sell it today you would earn a total of 2,654 from holding Citigroup or generate 60.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.75% |
| Values | Daily Returns |
Citigroup vs. XP Infra Fund
Performance |
| Timeline |
| Citigroup |
| XP Infra Fund |
Citigroup and XP Infra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and XP Infra
The main advantage of trading using opposite Citigroup and XP Infra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, XP Infra 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 XP Infra will offset losses from the drop in XP Infra's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| XP Infra vs. Energisa SA | XP Infra vs. BTG Pactual Logstica | XP Infra vs. Plano Plano Desenvolvimento | XP Infra vs. Companhia Habitasul de |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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