Correlation Between Citigroup and Clave Indices

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

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

Diversification Opportunities for Citigroup and Clave Indices

-0.53

Correlation Coefficient

Citigroup  Clave Indices

Excellent diversification

The 3 months correlation between Citigroup and Clave is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Clave Indices De in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clave Indices De 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 Clave Indices. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clave Indices De has no effect on the direction of Citigroup i.e., Citigroup and Clave Indices go up and down completely randomly.

Pair Corralation between Citigroup and Clave Indices

Taking into account the 90-day investment horizon Citigroup is expected to generate 7.17 times less return on investment than Clave Indices. In addition to that, Citigroup is 1.38 times more volatile than Clave Indices De. It trades about 0.01 of its total potential returns per unit of risk. Clave Indices De is currently generating about 0.15 per unit of volatility. If you would invest  7,810  in Clave Indices De on December 30, 2024 and sell it today you would earn a total of  1,032  from holding Clave Indices De or generate 13.21% return on investment over 90 days.

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

Citigroup  vs.  Clave Indices De

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.

Clave Indices De

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Clave Indices De are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain forward indicators, Clave Indices sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Clave Indices

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

The idea behind Citigroup and Clave Indices De 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.