Correlation Between Citigroup and GRUPO ECOENER

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

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

Diversification Opportunities for Citigroup and GRUPO ECOENER

0.69

Correlation Coefficient

Citigroup  GRUPO ECOENER

Poor diversification

The 3 months correlation between Citigroup and GRUPO is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and GRUPO ECOENER EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GRUPO ECOENER EO 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 GRUPO ECOENER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GRUPO ECOENER EO has no effect on the direction of Citigroup i.e., Citigroup and GRUPO ECOENER go up and down completely randomly.

Pair Corralation between Citigroup and GRUPO ECOENER

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.36 times less return on investment than GRUPO ECOENER. But when comparing it to its historical volatility, Citigroup is 1.16 times less risky than GRUPO ECOENER. It trades about 0.07 of its potential returns per unit of risk. GRUPO ECOENER EO is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  352.00  in GRUPO ECOENER EO on September 23, 2024 and sell it today you would earn a total of  73.00  from holding GRUPO ECOENER EO or generate 20.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	97.69%
Values	Daily Returns

Citigroup  vs.  GRUPO ECOENER EO

Citigroup

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental indicators, Citigroup may actually be approaching a critical reversion point that can send shares even higher in January 2025.

GRUPO ECOENER EO

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GRUPO ECOENER EO are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, GRUPO ECOENER reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and GRUPO ECOENER

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

The idea behind Citigroup and GRUPO ECOENER EO 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.