Correlation Between Citigroup and Hsi Ativos

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

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

Diversification Opportunities for Citigroup and Hsi Ativos

0.12

Correlation Coefficient

Citigroup  Hsi Ativos

Average diversification

The 3 months correlation between Citigroup and Hsi is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Hsi Ativos Financeiros in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hsi Ativos Financeiros 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 Hsi Ativos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hsi Ativos Financeiros has no effect on the direction of Citigroup i.e., Citigroup and Hsi Ativos go up and down completely randomly.

Pair Corralation between Citigroup and Hsi Ativos

Taking into account the 90-day investment horizon Citigroup is expected to generate 5.01 times less return on investment than Hsi Ativos. In addition to that, Citigroup is 1.02 times more volatile than Hsi Ativos Financeiros. It trades about 0.04 of its total potential returns per unit of risk. Hsi Ativos Financeiros is currently generating about 0.22 per unit of volatility. If you would invest  6,155  in Hsi Ativos Financeiros on December 20, 2024 and sell it today you would earn a total of  1,648  from holding Hsi Ativos Financeiros or generate 26.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.31%
Values	Daily Returns

Citigroup  vs.  Hsi Ativos Financeiros

Citigroup

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 3 (%) 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 recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Hsi Ativos Financeiros

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Hsi Ativos Financeiros are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, Hsi Ativos sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Hsi Ativos

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

The idea behind Citigroup and Hsi Ativos Financeiros 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.