Correlation Between Citigroup and Binh Thanh

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

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

Diversification Opportunities for Citigroup and Binh Thanh

-0.79

Correlation Coefficient

Citigroup  Binh Thanh

Pay attention - limited upside

The 3 months correlation between Citigroup and Binh is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Binh Thanh Import in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binh Thanh Import 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 Binh Thanh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Binh Thanh Import has no effect on the direction of Citigroup i.e., Citigroup and Binh Thanh go up and down completely randomly.

Pair Corralation between Citigroup and Binh Thanh

Taking into account the 90-day investment horizon Citigroup is expected to under-perform the Binh Thanh. But the stock apears to be less risky and, when comparing its historical volatility, Citigroup is 1.79 times less risky than Binh Thanh. The stock trades about -0.01 of its potential returns per unit of risk. The Binh Thanh Import is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  2,005,000  in Binh Thanh Import on September 20, 2024 and sell it today you would earn a total of  185,000  from holding Binh Thanh Import or generate 9.23% return on investment over 90 days.

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

Citigroup  vs.  Binh Thanh Import

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.

Binh Thanh Import

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Binh Thanh Import has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's essential indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Citigroup and Binh Thanh

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

The idea behind Citigroup and Binh Thanh Import 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.