Correlation Between Citigroup and Graha Layar

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

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

Diversification Opportunities for Citigroup and Graha Layar

-0.17

Correlation Coefficient

Citigroup  Graha Layar

Good diversification

The 3 months correlation between Citigroup and Graha is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Graha Layar Prima in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graha Layar Prima 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 Graha Layar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graha Layar Prima has no effect on the direction of Citigroup i.e., Citigroup and Graha Layar go up and down completely randomly.

Pair Corralation between Citigroup and Graha Layar

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.49 times more return on investment than Graha Layar. However, Citigroup is 1.49 times more volatile than Graha Layar Prima. It trades about 0.04 of its potential returns per unit of risk. Graha Layar Prima is currently generating about -0.13 per unit of risk. If you would invest  6,929  in Citigroup on December 23, 2024 and sell it today you would earn a total of  269.00  from holding Citigroup or generate 3.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.08%
Values	Daily Returns

Citigroup  vs.  Graha Layar Prima

Citigroup

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Citigroup is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Graha Layar Prima

Risk-Adjusted Performance

Very Weak

Over the last 90 days Graha Layar Prima has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Citigroup and Graha Layar

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

The idea behind Citigroup and Graha Layar Prima 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.

Check out your portfolio center.

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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.