Correlation Between Citigroup and Betonjaya Manunggal

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

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

Diversification Opportunities for Citigroup and Betonjaya Manunggal

-0.34

Correlation Coefficient

Citigroup  Betonjaya Manunggal

Very good diversification

The 3 months correlation between Citigroup and Betonjaya is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Betonjaya Manunggal Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Betonjaya Manunggal Tbk 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 Betonjaya Manunggal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Betonjaya Manunggal Tbk has no effect on the direction of Citigroup i.e., Citigroup and Betonjaya Manunggal go up and down completely randomly.

Pair Corralation between Citigroup and Betonjaya Manunggal

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.98 times more return on investment than Betonjaya Manunggal. However, Citigroup is 1.02 times less risky than Betonjaya Manunggal. It trades about 0.01 of its potential returns per unit of risk. Betonjaya Manunggal Tbk is currently generating about -0.06 per unit of risk. If you would invest  6,991  in Citigroup on December 30, 2024 and sell it today you would earn a total of  42.00  from holding Citigroup or generate 0.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

Citigroup  vs.  Betonjaya Manunggal Tbk

Citigroup

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 1 (%) 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 newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Betonjaya Manunggal Tbk

Risk-Adjusted Performance

Very Weak

Over the last 90 days Betonjaya Manunggal Tbk 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 Betonjaya Manunggal

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

The idea behind Citigroup and Betonjaya Manunggal Tbk 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.