Correlation Between Citigroup and Actoz Soft

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

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

Diversification Opportunities for Citigroup and Actoz Soft

0.31

Correlation Coefficient

Citigroup  Actoz Soft

Weak diversification

The 3 months correlation between Citigroup and Actoz is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Actoz Soft CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Actoz Soft CoLtd 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 Actoz Soft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Actoz Soft CoLtd has no effect on the direction of Citigroup i.e., Citigroup and Actoz Soft go up and down completely randomly.

Pair Corralation between Citigroup and Actoz Soft

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.56 times more return on investment than Actoz Soft. However, Citigroup is 1.8 times less risky than Actoz Soft. It trades about 0.24 of its potential returns per unit of risk. Actoz Soft CoLtd is currently generating about 0.03 per unit of risk. If you would invest  7,075  in Citigroup on October 25, 2024 and sell it today you would earn a total of  1,094  from holding Citigroup or generate 15.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	92.68%
Values	Daily Returns

Citigroup  vs.  Actoz Soft CoLtd

Citigroup

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Actoz Soft CoLtd

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Actoz Soft CoLtd are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Actoz Soft may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Citigroup and Actoz Soft

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

The idea behind Citigroup and Actoz Soft CoLtd 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.