Correlation Between Tres Tentos and Citigroup
Can any of the company-specific risk be diversified away by investing in both Tres Tentos and Citigroup 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 Tres Tentos and Citigroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tres Tentos Agroindustrial and Citigroup, you can compare the effects of market volatilities on Tres Tentos and Citigroup 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 Tres Tentos with a short position of Citigroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tres Tentos and Citigroup.
Diversification Opportunities for Tres Tentos and Citigroup
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tres and Citigroup is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Tres Tentos Agroindustrial and Citigroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup and Tres Tentos 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 Tres Tentos Agroindustrial are associated (or correlated) with Citigroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citigroup has no effect on the direction of Tres Tentos i.e., Tres Tentos and Citigroup go up and down completely randomly.
Pair Corralation between Tres Tentos and Citigroup
Assuming the 90 days trading horizon Tres Tentos is expected to generate 1.18 times less return on investment than Citigroup. In addition to that, Tres Tentos is 1.43 times more volatile than Citigroup. It trades about 0.04 of its total potential returns per unit of risk. Citigroup is currently generating about 0.08 per unit of volatility. If you would invest 4,127 in Citigroup on October 13, 2024 and sell it today you would earn a total of 3,173 from holding Citigroup or generate 76.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Tres Tentos Agroindustrial vs. Citigroup
Performance |
| Timeline |
| Tres Tentos Agroindu |
| Citigroup |
Tres Tentos and Citigroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tres Tentos and Citigroup
The main advantage of trading using opposite Tres Tentos and Citigroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tres Tentos position performs unexpectedly, Citigroup 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 Citigroup will offset losses from the drop in Citigroup's long position.| Tres Tentos vs. Boa Safra Sementes | Tres Tentos vs. Ambipar Participaes e | Tres Tentos vs. Vamos Locao de | Tres Tentos vs. Petroreconcavo SA |
| Citigroup vs. Tres Tentos Agroindustrial | Citigroup vs. The Home Depot | Citigroup vs. Bemobi Mobile Tech | Citigroup vs. Brpr Corporate Offices |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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