Correlation Between Citigroup and Fomento Econmico
Can any of the company-specific risk be diversified away by investing in both Citigroup and Fomento Econmico 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 Fomento Econmico into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Fomento Econmico Mexicano, you can compare the effects of market volatilities on Citigroup and Fomento Econmico 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 Fomento Econmico. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Fomento Econmico.
Diversification Opportunities for Citigroup and Fomento Econmico
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Fomento is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Fomento Econmico Mexicano in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fomento Econmico Mexicano 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 Fomento Econmico. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fomento Econmico Mexicano has no effect on the direction of Citigroup i.e., Citigroup and Fomento Econmico go up and down completely randomly.
Pair Corralation between Citigroup and Fomento Econmico
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.12 times more return on investment than Fomento Econmico. However, Citigroup is 1.12 times more volatile than Fomento Econmico Mexicano. It trades about 0.05 of its potential returns per unit of risk. Fomento Econmico Mexicano is currently generating about -0.1 per unit of risk. If you would invest 6,060 in Citigroup on September 24, 2024 and sell it today you would earn a total of 859.00 from holding Citigroup or generate 14.17% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 97.65% |
Values | Daily Returns |
Citigroup vs. Fomento Econmico Mexicano
Performance |
Timeline |
Citigroup |
Fomento Econmico Mexicano |
Citigroup and Fomento Econmico Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Citigroup and Fomento Econmico
The main advantage of trading using opposite Citigroup and Fomento Econmico positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Fomento Econmico 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 Fomento Econmico will offset losses from the drop in Fomento Econmico's long position.Citigroup vs. Nu Holdings | Citigroup vs. Canadian Imperial Bank | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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