Correlation Between Bancolombia and Citius Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Bancolombia and Citius Pharmaceuticals 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 Bancolombia and Citius Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bancolombia SA ADR and Citius Pharmaceuticals, you can compare the effects of market volatilities on Bancolombia and Citius Pharmaceuticals 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 Bancolombia with a short position of Citius Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bancolombia and Citius Pharmaceuticals.
Diversification Opportunities for Bancolombia and Citius Pharmaceuticals
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bancolombia and Citius is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Bancolombia SA ADR and Citius Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citius Pharmaceuticals and Bancolombia 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 Bancolombia SA ADR are associated (or correlated) with Citius Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citius Pharmaceuticals has no effect on the direction of Bancolombia i.e., Bancolombia and Citius Pharmaceuticals go up and down completely randomly.
Pair Corralation between Bancolombia and Citius Pharmaceuticals
Considering the 90-day investment horizon Bancolombia SA ADR is expected to generate 0.11 times more return on investment than Citius Pharmaceuticals. However, Bancolombia SA ADR is 8.95 times less risky than Citius Pharmaceuticals. It trades about 0.06 of its potential returns per unit of risk. Citius Pharmaceuticals is currently generating about -0.27 per unit of risk. If you would invest 3,238 in Bancolombia SA ADR on August 31, 2024 and sell it today you would earn a total of 53.00 from holding Bancolombia SA ADR or generate 1.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bancolombia SA ADR vs. Citius Pharmaceuticals
Performance |
| Timeline |
| Bancolombia SA ADR |
| Citius Pharmaceuticals |
Bancolombia and Citius Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bancolombia and Citius Pharmaceuticals
The main advantage of trading using opposite Bancolombia and Citius Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bancolombia position performs unexpectedly, Citius Pharmaceuticals 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 Citius Pharmaceuticals will offset losses from the drop in Citius Pharmaceuticals' long position.| Bancolombia vs. Banco De Chile | Bancolombia vs. Banco Bradesco SA | Bancolombia vs. Banco Santander Chile | Bancolombia vs. Intercorp Financial Services |
| Citius Pharmaceuticals vs. X4 Pharmaceuticals | Citius Pharmaceuticals vs. Hookipa Pharma | Citius Pharmaceuticals vs. Mereo BioPharma Group | Citius Pharmaceuticals vs. Acumen Pharmaceuticals |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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