Correlation Between Citigroup and Asuransi Kresna

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

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

Diversification Opportunities for Citigroup and Asuransi Kresna

0.01

Correlation Coefficient

Citigroup  Asuransi Kresna

Significant diversification

The 3 months correlation between Citigroup and Asuransi is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Asuransi Kresna Mitra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asuransi Kresna Mitra 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 Asuransi Kresna. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asuransi Kresna Mitra has no effect on the direction of Citigroup i.e., Citigroup and Asuransi Kresna go up and down completely randomly.

Pair Corralation between Citigroup and Asuransi Kresna

Taking into account the 90-day investment horizon Citigroup is expected to generate 5.01 times less return on investment than Asuransi Kresna. But when comparing it to its historical volatility, Citigroup is 3.76 times less risky than Asuransi Kresna. It trades about 0.06 of its potential returns per unit of risk. Asuransi Kresna Mitra is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  700.00  in Asuransi Kresna Mitra on September 29, 2024 and sell it today you would earn a total of  400.00  from holding Asuransi Kresna Mitra or generate 57.14% return on investment over 90 days.

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

Citigroup  vs.  Asuransi Kresna Mitra

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.

Asuransi Kresna Mitra

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Asuransi Kresna Mitra are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Asuransi Kresna disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Asuransi Kresna

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

The idea behind Citigroup and Asuransi Kresna Mitra 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.