Correlation Between Citigroup and Banco Actinver

Can any of the company-specific risk be diversified away by investing in both Citigroup and Banco Actinver 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 Banco Actinver into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Citigroup and Banco Actinver SA, you can compare the effects of market volatilities on Citigroup and Banco Actinver 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 Banco Actinver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Banco Actinver.

Diversification Opportunities for Citigroup and Banco Actinver

0.16

Correlation Coefficient

Citigroup  Banco Actinver

Average diversification

The 3 months correlation between Citigroup and Banco is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Banco Actinver SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Actinver SA 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 Banco Actinver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Actinver SA has no effect on the direction of Citigroup i.e., Citigroup and Banco Actinver go up and down completely randomly.

Pair Corralation between Citigroup and Banco Actinver

Given the investment horizon of 90 days Citigroup is expected to generate 1.68 times more return on investment than Banco Actinver. However, Citigroup is 1.68 times more volatile than Banco Actinver SA. It trades about -0.01 of its potential returns per unit of risk. Banco Actinver SA is currently generating about -0.1 per unit of risk. If you would invest  145,666  in Citigroup on December 31, 2024 and sell it today you would lose (2,966) from holding Citigroup or give up 2.04% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Citigroup  vs.  Banco Actinver SA

Citigroup

Risk-Adjusted Performance

Very Weak

Over the last 90 days Citigroup has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong primary indicators, Citigroup is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Banco Actinver SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Banco Actinver SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Citigroup and Banco Actinver

The main advantage of trading using opposite Citigroup and Banco Actinver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Banco Actinver 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 Banco Actinver will offset losses from the drop in Banco Actinver's long position.

The idea behind Citigroup and Banco Actinver SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.