Correlation Between Citigroup and Fundos De

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

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

Diversification Opportunities for Citigroup and Fundos De

0.78

Correlation Coefficient

Citigroup  Fundos De

Poor diversification

The 3 months correlation between Citigroup and Fundos is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Fundos de Investimento in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fundos de Investimento 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 Fundos De. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fundos de Investimento has no effect on the direction of Citigroup i.e., Citigroup and Fundos De go up and down completely randomly.

Pair Corralation between Citigroup and Fundos De

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.71 times more return on investment than Fundos De. However, Citigroup is 1.4 times less risky than Fundos De. It trades about 0.07 of its potential returns per unit of risk. Fundos de Investimento is currently generating about 0.0 per unit of risk. If you would invest  4,219  in Citigroup on September 21, 2024 and sell it today you would earn a total of  2,623  from holding Citigroup or generate 62.17% return on investment over 90 days.

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

Citigroup  vs.  Fundos de Investimento

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 unfluctuating fundamental indicators, Citigroup may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Fundos de Investimento

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fundos de Investimento are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, Fundos De sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Fundos De

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

The idea behind Citigroup and Fundos de Investimento 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.