Correlation Between Citigroup and PT Indo

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

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

Diversification Opportunities for Citigroup and PT Indo

0.48

Correlation Coefficient

Citigroup  PT Indo

Very weak diversification

The 3 months correlation between Citigroup and 3IB is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and PT Indo Tambangraya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Indo Tambangraya 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 PT Indo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Indo Tambangraya has no effect on the direction of Citigroup i.e., Citigroup and PT Indo go up and down completely randomly.

Pair Corralation between Citigroup and PT Indo

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.58 times more return on investment than PT Indo. However, Citigroup is 1.72 times less risky than PT Indo. It trades about 0.01 of its potential returns per unit of risk. PT Indo Tambangraya is currently generating about -0.15 per unit of risk. If you would invest  7,087  in Citigroup on September 29, 2024 and sell it today you would earn a total of  13.00  from holding Citigroup or generate 0.18% return on investment over 90 days.

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

Citigroup  vs.  PT Indo Tambangraya

Citigroup

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

PT Indo Tambangraya

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Indo Tambangraya has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Citigroup and PT Indo

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

The idea behind Citigroup and PT Indo Tambangraya 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.